The Asian Development Bank (ADB) is increasing lending capacities across Asia Pacific.
An agreement with German insurer Munich Re will provide a US$250mn cover to help the bank’s trade finance programme increase support for trade in the region.
The agreement seals the first deal of this kind between Munich Re and the ADB. “With the private sector involved, we can add capacity to trade financing in challenging markets, leverage the ADB’s own resources, and most importantly, expose the private sector to new markets,” says Steven Beck, the ADB’s head of trade finance.
One of the emerging regional economies benefiting from the programme is Myanmar, which received ADB President Takehiko Nakao last week. Nakao announced the expansion of the annual sovereign concessional lending for projects from around US$150mn to US$350mn, starting next year. The focus of the lending is on infrastructure and job creation, but the bank is also increasing its lending, equity investment and guarantees to the private sector in Myanmar’s infrastructure and finance sectors.
According to Nakao, the country is moving in the right direction to improve its development and business environment, and he welcomed government initiatives to increase infrastructure investment through public-private partnerships (PPPs) in telecommunications and power generation. “Further improvement of the business environment is essential to attract foreign direct investment, which will boost financial resources as well as transfer of knowledge and technology,” says Nakao.
Nakao also recently visited Vietnam, where he confirmed ADB’s sovereign lending of about US$1bn annually, but also offered words of advice in the realm of economic policies and reforms. “It is particularly important to reform state-owned enterprises by reducing the state’s ownership, improving corporate governance, and strengthening financial performance,” he said. “The government also needs to resolve non-performing loans, strengthen tax revenues, and improve efficiency of public expenditures.”
Both in Myanmar and in Vietnam, the ADB is committed to supporting infrastructure and power transmission systems among other, as well as lending to private sector and supporting PPPs.