ADB sets up $3 bn fund to aid fiscal spending

BALI: The Asian Development Bank will establish - pending Board of Directors' approval - a USD 3 billion fund to help developing member countries (DMCs) swiftly ramp up the fiscal spending needed to overcome the global economic crisis and help sustain longer-term growth.

ADB President Haruhiko Kuroda said, the Countercyclical Support Facility (CSF) will provide short-term loans faster and cheaper than under ADB's existing special program loan (SPL) facilities, and will be available to DMCs which qualify for loans from ADB's Ordinary Capital Resources (OCR).

OCR is a pool of ADB funds available for lending to middle-income countries at near market terms.

"I believe this will be a very welcome initiative to assist faltering economies and, most importantly, protect the poor from the worst impact of the crisis," Kuroda said in a statement at the ongoing 42nd ADB Board of Governors Annual Meeting here.

The CSF announcement came just two days after the ADB's Board of Governors agreed to triple ADB's capital base from USD 55 billion to USD 165 billion.

The 200 per cent increase allows ADB to substantially increase its support to countries affected by the global downturn and the the new facility would form part of that assistance.