The Asian Development Bank (ADB) on Tuesday approved a ceiling of up to $18 billion in policy-based lending (PBL) between 2022 and 2024 and enhanced its crisis-response instruments to support its developing member countries (DMCs) as they pursue a green, resilient, and inclusive recovery.

Director General of ADB’s Strategy, Policy, and Partnerships Department Tomoyuki Kimura Said that while Asia and the Pacific have made progress in addressing the Covid-19 pandemic, significant risks to the regional economic outlook remain, including new virus variants, inflation threats, financial stress caused by rising interest rates, as well as uncertain ramifications from the Russian invasion of Ukraine.

Expanded PBL commitments will support DMCs to undertake critical policy reforms and to address gaps in governments’ development financing requirements, according to a release from the ADB.

To maximise development impact, ADB has also introduced measures to enhance PBL quality and to strengthen oversight by the Board of Directors.

“This package of additional assistance will ensure ADB remains responsive to our clients’ needs while helping to address long-term structural challenges facing the region, including climate change, rising inequality, and building resilience to future disasters,” he said.

To better support DMCs facing economic shocks, ADB has enhanced its Countercyclical Support Facility, which provides fast-disbursing emergency budget support during crises.

Revisions include expanding coverage to ADB’s most vulnerable low and lower-middle DMCs, increasing individual country resource ceilings, enhancing the focus on targeting poor and vulnerable groups, and making lending terms less onerous to improve access.

ADB’s Contingent Disaster Financing has been strengthened to provide coverage for a broader range of future emergencies, including health crises, and by introducing a multiyear funding replenishment option for DMCs that are exposed to frequent disasters and emergencies.

“Together, this package of additional support and enhancements to our existing instruments will bolster ADB’s ability to support DMCs in addressing the challenges they are confronting and to achieve a green, resilient, and inclusive recovery,” said Kimura.