Fiduciary Safeguard

Fiduciary Safeguard
11.11  Since general budget support under stand-alone policy-based lending and
programmatic approach are absorbed into a DMC’s public expenditures in the form
of counterpart funds of loan proceeds, fiduciary arrangements need to be in place
to ensure efficient utilization of overall resources through sound public financial
management.
Loan Proceeds and Disbursement Procedures
11.12  There is considerable flexibility in the use of policy-based loan proceeds to meet a
DMC’s developmental needs. The loan proceeds may be utilized to finance economywide import requirements on the basis of a negative import list, or sector-specific
import requirements on the basis of a positive import list.
11.13  A negative import list specifies imports that are excluded from financing under
the loan, either by item or by specification of the Standard International Trade
Classification. All items not listed may be financed under the loan. In contrast,
a positive import list specifies eligible imports for financing under the loan.
11.14  The proceeds of a policy-based loan for which there is only a negative list of ineligible
items may be disbursed without supporting import documentation if, during each
year
7
in which the proceeds of the policy-based loan are expected to be disbursed,
the value of the DMC’s total imports minus (x) imports from nonmember countries,
(y) ineligible imports, and (z) disbursements made under other official development
assistance, is greater than the amounts expected to be disbursed during such year.
The borrower will be required to submit with each withdrawal request a certification
(Section 11.16) confirming the borrower’s compliance with the above formula
in respect of the period covered by the withdrawal request. Otherwise, import
documentation under existing procedures will still be required.
8
Documentation in
respect of specific imports will continue to be required for policy-based loans for
which a positive list of eligible items is utilized.
11.15  Disbursement under policy-based loans normally takes the form of reimbursement
to the central bank of the DMC acting as a depository. The central bank is generally
responsible for administering policy-based loans in close consultation with the
government and sector-specific entities responsible for implementing the sector
program. Where appropriate, the central bank may disburse the loan through
commercial banks or development finance institutions or both.
7
This will normally be the 1-year period for which trade statistics are maintained by the DMC concerned.
8
ADB. 1998. Simplification of Disbursement Procedures and Related Requirements for Program Loans.Manila.

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Free Every Body With Telephone on my site Call get one free

11.6  Direct payment, commitment,3 and reimbursement
4
procedures may be used, as
appropriate (Chapters 7–9).
11.7  ADB may approve the use of the imprest fund procedure (Chapter 10) under FILs.
The advance to the imprest account should not exceed 6 months’ estimated cash
flow required for payments to be made to sub-borrowers for eligible subprojects.
The imprest account may be maintained in a separate bank account, or separate
account of DFIs or PFIs with fiduciary arrangements acceptable to ADB.
11.8  ADB may approve the use of the statement of expenditures (SOE) procedure
(Chapter 9)
5
to spare the borrower, DFI, or PFI the trouble of attaching voluminous
documentation for numerous and small amounts of individual payments for
subloans to WAs. The SOE ceiling, if any, for the nonsubmission of full supporting
documentation may be established at the free limit agreed for the FIL. The SOE form
for this purpose is shown in Appendix 9C.
11.9   If an individual payment amount exceeds the SOE ceiling, if any, appropriate
supporting documents (e.g., invoices for subproject, subloan agreement) should be
submitted to ADB.
POLICY-BASED LOANS
Purpose of the Policy-Based Loan
11.10  ADB provides policy-based lending in the form of budget support in conjunction
with structural reforms and development expenditure programs of a developing
member country (DMC). It is also used to provide balance-of-payments
assistance during economic and financial crises. ADB makes policy-based loans
6
only to DMC governments. In general, policy-based loans (i) are linked to the
implementation of policy reforms and are disbursed quickly, and (ii) have sector-wide
and economy-wide impacts.
3
For instance, direct payment (or commitment letter) to sub-borrowers may be used for paying subproject
expenditures incurred.
4
For instance, reimbursement to EA, DFI, or PFI may be used if EA, DFI, or PFI has already paid subloans.
5
Formerly, the simultaneous authorization and withdrawal (SAW) procedure was also used. The use of the
SAW procedure, if so stipulated in a loan agreement, is not superseded by the revision of this handbook.
6
Refer to Sections D4/BP and D4/OP of the Operations Manual (ADB. 2011. Policy-Based Lending. Operations
Manual.Manila). The term “policy-based loan” as used in this chapter also refers to policy-based grants,
unless the context requires otherwise.

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FINANCIAL INTERMEDIATION LOANS

FINANCIAL INTERMEDIATION LOANS

Description
11.1  Financial intermediation loans (FILs)
1
seek to help achieving the following objectives:
(i) furthering policy reforms in the financial and real sectors; (ii) financing real sector
investments through market-based allocation mechanisms; (iii) strengthening the
capacity, governance, and sustainability of participating financial intermediaries;
and (iv) helping increase the outreach, efficiency, infrastructure, and stability of the
financial system.
11.2  Development finance institutions (DFIs) and participating financial intermediaries
(PFIs) are autonomous financial intermediary entities authorized by the borrower to
receive loans either directly from the Asian Development Bank (ADB) or through the
borrower for passing on the loan amount to the final beneficiaries as subloans.
11.3  FILs are relent by DFIs and PFIs to sub-borrowers such as small- and medium-sized
industries, enterprises, or individuals for eligible subprojects.
Free Limit
11.4  ADB generally allows financial intermediaries to enter into subloans meeting agreed
criteria without submitting subloan proposals to ADB for amounts up to an agreed
“free limit.” The requirement of a free limit, above which subloan proposals need to
be submitted by the financial intermediary to ADB for prior approval, enables ADB
to satisfy itself on the quality of the financial intermediary’s appraisal of projects and
advise on appraisal techniques and methodology.
2
Disbursement Procedures
11.5  Under FILs, ADB provides funds to eligible DFIs and PFIs for onlending, at the
financial intermediary’s credit risk, to final borrowers (sub-borrowers) for eligible
subprojects. Disbursement arrangements and funds flow under FILs should be
provided in the project administration manual (PAM), as they are determined with
project-specific considerations.

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FINANCIAL INTERMEDIATION LOANS

FINANCIAL INTERMEDIATION LOANS

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Item Required Supporting Documents

Item Required Supporting Documents

Initial advance and
additional advance
Estimate of expenditure (Appendix 10B) to support the amount of the initial
advance and the additional advance (see also Sections 10.12 and 10.19).
Liquidation and
replenishment, or
liquidation only
1.  IARS (Appendix 10C).
2.  Bank statement.
3.  Either one of the following, as applicable:
–  (With SOE approved): SOE.
– (With full supporting documents, i.e., SOE is not approved): Summary
sheet (Appendix 7B) and proof of payment and supporting documents
as required under direct payment (Sections 7.4–7.5).
– (For expense items exceeding any applicable SOE ceiling): Same as the
above with full supporting documents.
4. In addition, if FAW procedure is approved and used, and the amounts
requested to be withdrawn are paid from the imprest fund, the certificates
for FAW (Appendix 9D) need to be attached to the WA.
ADB = Asian Development Bank, FAW = force account works, IARS = imprest account reconciliation statement, SOE = statement
of expenditures, WA = withdrawal application.
a
  If supporting documents are written in local language, there should be an English translation of important words and items in the
documents (e.g., the title of the document, name of the supplier and/or contractor, description of goods and services, amounts,
and dates).

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The imprest fund procedure must be audited at least annually by independent and qualified auditors acceptable to ADB.

Audit Arrangements
10.28  The imprest fund procedure must be audited at least annually by independent and
qualified auditors acceptable to ADB. The audits are carried out as part of the regular
annual audits of the project financial statements prepared by the borrower, EA, or IA.
11
Review by ADB Staff
10.29  ADB reserves the right to conduct spot or random checks of the imprest account and
expenditures paid from the imprest account (including those expenditures paid from
the subaccounts) through special disbursement missions or review missions, or upon
ADB’s request for submission of supporting documents on a sampling basis.
Suspending Replenishment
10.30  ADB may suspend replenishment of the imprest account if
ȕ the loan is declared suspended by ADB, partially
12
or fully;
ȕ audit reports, management letters, or ADB missions indicate significant
irregularities in financial management, accounting, internal control, and/or the
operation of the imprest account(s) and/or the subaccount(s); or
ȕ the imprest account has been inactive for more than 6 months and no application
for replenishment has been submitted.
10.31  During the suspension, no additional funds will be advanced to the imprest account.
However, available funds in the imprest account (including the subaccounts) can
be used to meet eligible expenditures, unless otherwise instructed by ADB.
13
WAs submitted for these expenditures will be applied to liquidate the balance
of advances.
Narrative Procedures
10.32  The narrative procedures and the check list for the imprest fund procedure are shown
in Appendix 10E.
Supporting Documents
10.33  The supporting documents listed in the following table should be submitted to
ADB together with the WA. If simplified documentation (i.e., SOE and/or FAW) is
approved, supporting documents should be retained by the EA and/or IA for annual
audit of project financial statements and/or ADB’s review (see Section 4.29 for
the retention period of supporting documents). ADB reserves the right to request
submission of such documents if deemed necessary. Additional supporting documents
which are not listed in the following table may be required, depending on the
transaction involved. ADB will return WAs that do not meet the requirements.
11
See OM J7, PAI 5.07, and Technical Guidance Note on Financial Reporting and Auditing.
12
Suspension is applicable only to affected EA or component.
13
ADB may demand immediate refund of the available funds in cases where the suspension is due to significant
irregularities in the operation of the imprest account and/or the subaccounts.

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expense items exceeding any applicable SOE ceiling

Item Required Supporting Documents

a

Initial advance and 

additional advance

Estimate of expenditure (Appendix 10B) to support the amount of the initial 

advance and the additional advance (see also Sections 10.12 and 10.19).

Liquidation and 

replenishment, or 

liquidation only

1.  IARS (Appendix 10C).

2.  Bank statement.

3.  Either one of the following, as applicable: 

–  (With SOE approved): SOE.

– (With full supporting documents, i.e., SOE is not approved): Summary 

sheet (Appendix 7B) and proof of payment and supporting documents 

as required under direct payment (Sections 7.4–7.5).

– (For expense items exceeding any applicable SOE ceiling): Same as the 

above with full supporting documents.

4. In addition, if FAW procedure is approved and used, and the amounts 

requested to be withdrawn are paid from the imprest fund, the certificates 

for FAW (Appendix 9D) need to be attached to the WA. 

ADB = Asian Development Bank, FAW = force account works, IARS = imprest account reconciliation statement, SOE = statement 

of expenditures, WA = withdrawal application. 

a

  If supporting documents are written in local language, there should be an English translation of important words and items in the 

documents (e.g., the title of the document, name of the supplier and/or contractor, description of goods and services, amounts, 

and dates).

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insufficiently supported or ineligible for ADB financing, ADB may offset the

Ineligible Payments
9.22  Where ADB subsequently finds any payment made under the SOE procedure to
be insufficiently supported or ineligible for ADB financing, ADB may offset the
amount of the unjustified or ineligible payment against subsequent withdrawals for
reimbursement, or request the borrower or EA to refund the same amount to the
loan account.
Audit Arrangements
9.23  SOE records must be audited regularly by independent and qualified auditors
acceptable to ADB. The audit is carried out as part of the regular annual audit of
project financial statements.
5

Review by ADB Staff
9.24  ADB reserves the right to conduct spot or random checks of expenditures covered
by SOEs through disbursement missions or review missions. Documents are to
be kept in the office of the EA or IA as appropriate (see Section 4.29 for retention
period of supporting documents) and must be made readily available for checking by
ADB’s disbursement and review missions or upon ADB’s request for submission of
supporting documents on a sampling basis.
Suspending Use of the Statement of Expenditures Procedure
9.25 ADB may suspend the use of the SOE procedure when the EA/IA’s capacity is no
longer deemed adequate. Examples of inadequate capacity, amongst others, are:
ȕ the borrower continuously claims ineligible expenditures;
ȕ the borrower fails to submit the audit report before the deadline;
ȕ the audit report and/or the management letter indicates significant irregularities
in financial management, accounting, internal control, or the use of the ADB
funds in project implementation; or
ȕ the disbursement or review mission finds significant irregularities in the use of
ADB funds.
Force Account Works Procedure
9.26  The force account works (FAW) procedure is a procedure for reimbursing the
borrower for expenditures in carrying out certain approved civil works required for
the project. The FAW procedure may also be used under the imprest fund procedure.
Two certificates are used instead of the usual supporting documents: the first on the
project’s physical progress (Part 1) and the second on its financial progress (Part 2)
(Appendix 9D).
5
See OM J7, PAI 5.07, and Technical Guidance Note on Financial Reporting and Auditing.

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Where the LC indicates a separate advising bank and nominated commercial bank,

Where the LC indicates a separate advising bank and nominated commercial bank,
ADB will issue the commitment letter to the nominated commercial bank, with a
copy provided to the advising bank. Indicating “negotiation with any bank” is not
acceptable.
3

8.9  A “transferrable” LC that allows the rights and obligations of the LC beneficiary
(i.e., manufacturer or exporter) to be transferred to another party, thereby creating a
secondary beneficiary, is not acceptable under ADB’s commitment letter procedure.
Therefore, the borrower or executing agency should not have the LC issuing bank
approve a transferrable LC.
8.10  No commitment letter is issued if shipment or LC expiry date fall beyond the loan
closing date.
Accepting the Commitment Letter
8.11  The nominated commercial bank’s first request for payment under the commitment
letter constitutes its acceptance of the terms and conditions of ADB’s commitment.
Payment to Commercial Banks
8.12  ADB pays from the loan account after receipt of the confirmation from the supplier’s
nominated commercial bank (normally a negotiating bank) which has paid for or
agreed to pay in accordance with the LC terms.
8.13  Requests for reimbursement from the nominated commercial bank are made
in authenticated SWIFT or tested telex. The word “Condiment”or the words
“(i) payment has been made or is due and will be promptly made to the
beneficiary under and in full compliance with the terms and conditions of the LC;
(ii) documents were presented within the original or extended expiry date; and
(iii) discrepancies, if any, have been referred to and accepted by LC issuing bank”
must be written on the request for reimbursement (Appendix 8C).
Amendments Requiring ADB’s Prior Approval
8.14  ADB’s prior approval is required for amendments to the LC involving changes such as
ȕ extension of the LC expiry date beyond the loan closing date of the loan account,
as specified in the loan agreement, or otherwise extended by ADB;
ȕ change in the LC’s value or currency;
ȕ description or quantity of goods;
ȕ country of origin;
ȕ beneficiary; and
ȕ terms of payment.
3
This is to keep the legal connection between the LC and ADB’s commitment letter, which is addressed to the
specific bank or payee.

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on behalf of the borrower, together with the authenticated

reviews Schedule 3 of the loan agreement
4
which provides details of ADB
financing such as amount, disbursement percentages (Sections 4.8–4.9), items of
financing, and applicable conditions of financing;
ȕ maintains records (see Section 4.29 for retention period) for all signed contracts
in a contract ledger for reference; and
ȕ takes proper actions for procurement in accordance with ADB guidelines.
5

Basic Requirements for Disbursement
4.6  The first withdrawal from the loan account requires the following:
ȕ ADB declared the loan effective;
ȕ the borrower submitted to ADB sufficient evidence of the authority of the
person(s) who will sign withdrawal applications (WAs) (Chapter 5) on behalf
of the borrower, together with the authenticated specimen signature of
each authorized person (Appendix 4B); any subsequent change in the list of
authorized representatives must be reported immediately and authenticated
specimen signatures of new representatives must also be provided; and
ȕ conditions for withdrawal (i.e., disbursement conditions [Appendix 3A]),
if specified in the loan agreement, were met as appropriate.
Eligible and Ineligible Expenditures
4.7  ADB will only finance eligible expenditures (Appendix 4C). Expenditures eligible for
financing are generally detailed in the loan agreement (e.g., attachment to Schedule 3,
allocation and withdrawal of loan proceeds, also referred to as the “allocation table”)
and the PAM.
Disbursement Percentage and Financing Percentage
4.8  The disbursement percentage6
is the ratio or proportion of ADB financing
7
which is
applied to expenditure claimed under a particular expenditure category, as specified
in the allocation table or other part of the loan agreement.
4.9  The disbursement percentage in the allocation table is derived from ADB’s financing
percentage as presented in the detailed cost estimate by financier provided in the PAM.
Disallowances and Nonpayments
4.10  Where ADB disallows or adjusts the amount of withdrawal the borrower requested,
ADB sends an advice in writing by fax, email, or other means such as the Loan
Financial Information System website (Chapter 14) to the borrower and/or EA citing
4
The reference to Schedule 3 of the loan agreement in this handbook also means similar schedule as provided
in the grant agreement or the financing agreement.
5
Refer to ADB’s Procurement Guidelines (2010, as amended from time to time) and Guidelines on the Use of
Consultants (2010, as amended from time to time).
6
Formerly, this was also called the “percentage for ADB financing” or “percentage and basis for withdrawal
from loan account.”
7
It also applies to external funding sources administered by ADB.

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When a loan becomes effective, a loan account is opened in ADB

General Guideline
4.1  The borrower1
is responsible for implementing the project according to the loan
2

agreement and other loan documents. The Asian Development Bank (ADB) monitors
the project and reviews its progress to ensure that the loan proceeds are spent as
agreed upon.
Loan Account
4.2  When a loan becomes effective, a loan account is opened in ADB’s books in the name
of the borrower and the loan amount is credited to that account. Withdrawal from
the loan account is approved only after fulfillment of the requirements mentioned in
Section 4.6.
Discussion of Disbursement Procedures during Project Preparation
4.3  During project preparation and loan negotiations, ADB’s different disbursement
procedures are discussed in detail by the borrower and ADB and documented in the
project administration manual (PAM) or facility administration manual (FAM).
3
These
discussions are important because they allow the borrower and ADB to identify the
disbursement procedures most suitable for the project.
Disbursement Letter
4.4  After the loan agreement is signed, the Loan Administration Division of the Controller’s
Department (CTLA) sends a disbursement letter (Appendix 4A) to the borrower to
remind the borrower of the necessary actions to be taken to withdraw funds from the
loan account. A web link to a copy of the handbook is provided in the letter.
Actions to Be Taken by the Borrower
4.5  As soon as the loan has become effective, and to expedite the disbursement,
the borrower
ȕ assigns qualified accountants and establishes sound internal control and
accounting systems in executing agencies (EAs) and implementing agencies;

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ADB may suspend in whole or in part the borrower’s right to withdraw from the loan

Suspending Withdrawals
3.14  ADB may suspend in whole or in part the borrower’s right to withdraw from the loan
account, as provided in the Loan Regulations, if after the date of the loan agreement
there is
ȕ nonpayment of principal, interest, or any other charge;
ȕ nonperformance of any obligation under the loan, guarantee, or project
agreements;
ȕ nonfulfillment by the borrower, the guarantor, or the EA of certain conditions
necessary for carrying out its project successfully;
ȕ suspension or cessation of membership of the borrower;
ȕ misrepresentations made by the borrower or the guarantor;
ȕ dissolution of the borrower or EA; or
ȕ any other event as specified in the loan agreement.
Accelerating Maturity
3.15  If certain events as indicated in the loan agreement or in the Loan Regulations occur
and continue for the period, ADB may declare as due and payable immediately
the principal of the loan then outstanding, together with all accrued interest and
other charges.

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agreed between ADB and the borrower

Retroactive financing applies to eligible expenditures as agreed between ADB and the
borrower. The loan agreement contains a specific provision indicating the amount and
category of expenditures and the date from which the expenditures are considered
eligible. The amount to be retroactively financed does not exceed 20% of the
loan amount.
Reallocating Loan Proceeds
3.10  The proceeds of an ADB loan are used only for the purposes for which the loan was
approved. No disbursements therefore are made directly from the “unallocated”
category of the loan agreement. ADB may agree to a borrower’s request to reallocate
funds from the “unallocated” or other categories to another allowable category for
project purposes. Normally the loan proceeds are reallocated after project progress
has been reviewed with the borrower during a review mission.
Loan Cancellation
3.11  Provisions for loan cancellation, suspension, and acceleration of maturity are
contained in the Loan Regulations (see Section 3.4 for relevant regulations) which
provide that, after consultation with ADB and with the concurrence of the guarantor,
if any, the borrower may, by notice to ADB, cancel any amount of the loan which
has not been withdrawn. The effective cancellation date is when ADB receives the
borrower’s notice of such cancellation.
3.12  Under the Loan Regulations, ADB may also, by notice to the borrower and the
guarantor, if any, cancel
11
any unwithdrawn amount of the loan when
ȕ the borrower’s right to make withdrawals from the loan account has been
suspended for a continuous 30 days;
ȕ ADB determines, at any time and after consultation with the borrower, that any
amount of the loan will not be required for purposes of the project;
ȕ ADB determines, with respect to any contract to be financed out of the
proceeds of the loan, that corrupt or fraudulent practices were engaged in by
representatives of the borrower, the guarantor, or any beneficiary of the loan
during the procurement of goods or services, consultants’ selection, or the
execution of the contract without the borrower or guarantor having taken
appropriate action to remedy the situation;
ȕ ADB determines that the procurement of any goods and services to be financed
out of the proceeds of the loan is inconsistent with the procedure set out in the
loan agreement; or
ȕ an amount of the loan remains unwithdrawn from the loan account by loan
closing date.
3.13  Upon giving such notice, ADB cancels any unwithdrawn amount of the loan.
11
The effective date of cancellation is the date of such notice by ADB to the borrower or the date specified in
the notice to the borrower.

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This Ingenious Machine Turns Feces Into Drinking Water

The loan agreementis an agreement between ADB and a borrower and sets out
the loan’s terms and conditions.
ȕ A guarantee agreementis an agreement between ADB and a borrowing member
country as guarantor of the loan when ADB lends directly to a nonmember entity.
ȕ A project agreementis an agreement between ADB and the project executing
agency (EA) or implementing agency of the borrower specifying requirements
related to, among other things, physical implementation of the project,
procurement provisions, and financial aspects, including the maintenance of
project financial statements and audit arrangements.
Loan Milestone Event Dates
3.6  Major loan milestone event dates include the following:
ȕ The approval dateis the date the loan is approved by ADB’s Board of Directors.
This date is also used for determining the loan amortization schedule as shown
in Schedule 2 of the loan agreement. For a loan under a multitranche financing
facility (MFF), the approval date is the date the subproject or loan is approved
by Management.
ȕ The signing dateis the date the loan agreement is signed by the borrower and
ADB. For ordinary capital resources loans, commitment charges will start to
accrue on the 60th day after the loan signing date.
ȕ The effective dateis the date when ADB advised the borrower that all conditions
of effectiveness of the loan agreement have been fulfilled by the borrower and
disbursements may be made from the loan account (Section 4.6).
ȕ The project completion dateis the date on which the project is considered
physically completed. This date precedes the loan closing date (normally
6 months before).
ȕ The loan closing dateis the date ADB may terminate the right of the borrower
to make withdrawals from the loan account. Expenditures incurred after the
loan closing date will not be financed under the loan (see Sections 4.15–4.24 for
matters related to loan closing).
Retroactive Financing
3.7  Retroactive financing is the financing of project expenditures incurred by the borrower
before a loan agreement becomes effective.
10
3.8  ADB may approve retroactive financing, at the borrower’s request, to finance
expenditures incurred prior to loan effective date but generally no earlier than
12 months before signing the loan agreement. A period longer than 12 months may be
allowed if justified in the RRP.

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Includes Ordinary Operations Loan Regulations, Special Operations Loan Regulations, Special Operations

Includes Ordinary Operations Loan Regulations, Special Operations Loan Regulations, Special Operations
Grant Regulations, and Externally Financed Grant Regulations.
5
ADB in practice applies similar principles to those set out in Articles 13 and 14(ix), (x), and (xi) of the
Charter to grants or loans from external funding sources that are administered by ADB, except when ADB
and the cofinancier agree otherwise.
6
ADB. 2010. Processing Sovereign and Sovereign-Guaranteed Loan Proposals. Operations Manual.OM D11.
Manila.
7
A PAM is prepared for project loans, and a facility administration manual (FAM) is prepared for multitranche
financing facilities (MFFs). The term “PAM” in this handbook also refers to FAMs unless the context
requires otherwise.
8
Except for program loans, policy-based loans, and technical assistance (TA). In the case of a program loan
or a policy-based loan, the development policy letter and policy matrix presented as part of the RRP should
specify required actions in the form of reform implementation, and the PAM would be optional. (ADB. 2010.
Processing Sovereign and Sovereign-Guaranteed Loan Proposals. Operations Manual.OM D11/OP. Manila.)
9
ADB. 2012. Disbursement. Operations Manual. OM J6. Manila.

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Loan or Grant Regulations
3.4  The regulations4
further set out conditions for the use of loan or grant proceeds
financed by ADB, or proceeds administered by ADB.
5
These documents are expressly
incorporated in the associated loan agreement, guarantee agreement, or grant
agreement. If any provision of a loan agreement, guarantee agreement, or grant
agreement is inconsistent with a provision of these regulations, the provision of the
loan agreement, guarantee agreement, or grant agreement governs.
Loan Documents
3.5  Loan documents
6
include the following documents and agreements:
ȕ Thereport and recommendation of the President to the Board of Directors
(RRP) presents the project proposal for consideration by the ADB Board.
ȕ Theproject administration manual (PAM)
7
includes all the information and
schedules describing project implementation and project readiness filters
covering major preproject implementation actions (e.g., government approvals,
procurement, and resettlement) to ensure a rapid start-up and enable early
disbursement. It is mandatory
8
that the PAM be referenced in the RRP and in
the loan (or facility) agreements, is presented as a stand-alone linked document
to the RRP, and serves as the main document describing implementation details.
The PAM is prepared in the course of loan processing and initially agreed with
the government at the loan fact-finding stage. At loan negotiations, the borrower
and ADB shall review and confirm the PAM agreed during loan fact-finding to
ensure consistency with the loan agreement, and such confirmation shall be
reflected in the minutes of the loan negotiations. The detailed cost estimate by
financier (one schedule included in the PAM) is prepared based on Section J6 of
the ADB Operations Manual (Appendix 3A).
9
Related illustrative tables are also
provided in this handbook (Appendix 3B).

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Basic Principles
3.1  The Agreement Establishing the Asian Development Bank (the ADB Charter)1
states
three main principles of disbursement for development projects:
ȕ The proceeds of any loan, investment, or other financing provided by the Asian
Development Bank (ADB) shall be used only for procurement in member
countries of goods and services produced in member countries unless specifically
permitted by its Board of Directors (Article 14[ix]).
ȕ The borrower shall be permitted by ADB to draw its funds only to meet
expenditures in connection with the project as they are actually incurred
(Article 14[x]).
ȕ Proceeds of any loan made, guaranteed, or participated by ADB are used only
for the purposes for which the loan was granted and with due attention to
considerations of economy and efficiency (Article 14[xi]).
3.2  The borrower2
can withdraw loan funds only for eligible expenditures incurred after
the loan agreement becomes effective, unless retroactive financing is provided in the
loan agreement.
Definitions
3.3  The following terms are defined for the purpose of this handbook:
ȕ closing date    The date ADB may terminate the right of the borrower
to make withdrawals from the loan
3
account.
ȕ disbursement  The withdrawal of proceeds from an ADB-financed
loan account.
ȕ eligible expenditures  Project expenditures that can be financed under an
ADB loan.
ȕ expenditures incurred  The borrower’s obligation to pay either as a result of
contractual terms or after goods and services have
been provided.
ȕ loan account    The account opened or to be opened by ADB on its
books in the name of the borrower, and to which the
amount of the loan has been or will be credited.
1
ADB. 1965. Agreement Establishing the Asian Development Bank.Manila.
2
“Borrower(s)” in this handbook refers to borrowers, recipients (of grants), and/or their executing agencies
unless the context requires otherwise.
3
The term “loan(s)” as used in this handbook refers to loan(s) and grant(s) for investment projects which are
managed by executing agencies unless the context requires otherwise.

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Asian Development Bank (ADB)

Purpose
1.1  This Loan Disbursement Handbookon the disbursement policies and procedures of
the Asian Development Bank (ADB) primarily guide borrowers
1
and their executing
agencies in withdrawing loan
2

proceeds from the loan account.
Scope and Applicability
1.2  The principles and procedures described in this handbook apply equally to ADB’s
loan- and grant-funded investment projects and policy-based loans and grants, in
whole or in part from ADB’s ordinary capital resources, ADB’s special funds resources,
and external funding sources that are administered by ADB. Chapter 13 of the
handbook covers ADB’s private sector (nonsovereign) operations. The handbook does
not apply to disbursements under technical assistance.
1.3  The handbook should be used in conjunction with the loan documents (Section 3.5)
and relevant ADB regulations and guidelines.
1.4  This handbook supersedes all previous handbooks and guidelines on loan disbursement.
Inquiries
1.5  For further information, visit the ADB website (http://www.adb.org), inquire to the
following address, or contact ADB’s resident or regional missions or representative
offices.
Controller
Asian Development Bank
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines
Tel: (632) 632-4444
Telex: 42205 ADB PM (ITT)
Philippines Fax: (632) 636-2586/636-2595
E-mail: lfis@adb.org
SWIFT address: ASDBPHMM
1
“Borrower(s)” in this handbook refers to borrowers, recipients (of grants), and/or their executing agencies,
unless the context requires otherwise.
2
The term “loan(s)” as used in this handbook refers to loan(s) and grant(s) for investment projects which
are managed by executing agencies, unless the context requires otherwise. Disbursement procedures
for policy-based loans and grants are described in Chapter 11. The reference to grant(s) does not include
technical assistance grants.

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LEADING NONLIFE INSURANCE COMPANIES

Bahamas
LEADING NONLIFE INSURANCE COMPANIES, 2012
Source: Axco InsuranceInformation Services.
LEADING LIFE INSURANCE COMPANIES, 2008
Gross written premiums
Company  USD Mn
Colina Imperial  147.4
Family Guardian  73.3
Atlantic Medical  67.5
British American  19.4
Generali Worldwide  17.5
Capital Life  6.6
Metlife  6.5
Laurentide  5.0
Sirius  2.0
Sagicor  0.8
Source: Axco InsuranceInformation Services.
Gross written
premiums
Company  USD Mn
Bahamas First General  103.9
RoyalStar Assurance  64.9
Insurance Company of The
Bahamas
43.3
Summit  35.6
Security and General  25.4
ICWI Bahamas  3.0
INSURANCE ASSOCIATION
Bahamas General Insurance Association
Web: www.bahamasinsurance.org
POPULATION, 2011-2014 (1)
Year  Population
2011  313,312
2012  316,182
2013  319,031
2014  321,834
(1) Estimated.
Source: U.S. Central Intelligence Agency.
GROSS DOMESTIC PRODUCT, 2009-2013 (1)
Year  GDP
2009  $9.2
2010  9.1
2011  8.9
2012  10.8
2013  11.4
(1) Based on Purchasing Power Parity calculations, which take
into account the relative cost of living and inflation rates of
countries. GDP estimate for July for each year shown.
Source: U.S. Central Intelligence Agency.
LIFE AND NONLIFE INSURANCE PREMIUMS, 2013
(U.S. $ millions)
Direct premiums
written
Nonlife premiums (1)  $539
Life premiums  154
Total premiums  $693
Percent of total world
premiums
0.01%
(1) Includes accident and health insurance.
Source: Swiss Re, sigma, No. 2/2014.

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2011 $2,611,718 $1,954,445 $4,566,163

Chapter 1: World Overview
World Overview
WORLD LIFE AND NONLIFE INSURANCE IN 2013
Outside the United States, the insurance industryis divided into life and nonlife, or general insurance, rather than
life/health and property/casualty. World insurance premiums rose 1.4 percent in 2013, adjusted for inflation, following
a 2.5 percent inflation-adjusted increase in 2012, according toSwiss Re’s latest study of world insurance. Nonlife
premiums rose 2.3 percent in 2013, adjusted for inflation, following 2.7 percent growth in 2012. Life insurance
premiums grew by 0.7 percent after inflation in 2013, down from2.3 percent inflation-adjusted growth in 2012.
In 2013 life and nonlife insurance premiums (excluding cross-border business) accounted for 6.3 percent of world
gross domestic product (GDP). Premiums accounted for 17.6 percent of GDP in Taiwan, the highest share in the
Swiss Re study, followed by 15.4 percent in South Africa, 13.2 percent in Hong Kong, 12.6 percent in the Netherlands
and 11.9 percent in South Korea. Premiums represented 7.5 percent of GDP in the United States, the 10th highest
share in the study.
WORLD LIFE AND NONLIFE INSURANCE
PREMIUMS, 2011-2013 (1)
(Direct premiums written, U.S. $ millions)
Year  Life  Nonlife (2)  Total
2011  $2,611,718  $1,954,445 $4,566,163
2012  2,630,274  1,968,677  4,598,951
2013  2,608,091  2,032,850  4,640,941
(1) Before reinsurance transactions.
(2) Includes accident and health insurance.
Source: Swiss Re, sigma, No. 3/2014.

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