Coronavirus: ADB hikes COVID-19 financial aid to $20B for member nations

The Asian Development Bank (ADB) on Monday said it has tripled the size of its COVID-19 response package for its member nations to $20 billion.

The multilateral funding agency said it has also approved measures to streamline its operations for quicker and more flexible delivery of assistance.

The package expands ADB's $6.5 billion initial response announced on March 18, adding $13.5 billion in resources to help its developing member countries counter the severe macroeconomic and health impacts caused by COVID-19, it said in a release.

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The $20 billion package includes about $2.5 billion in concessional and grant resources, it added.

"This pandemic threatens to severely set back economic, social, and development gains in Asia and the Pacific, reverse progress on poverty reduction, and throw economies into recession," said ADB President Masatsugu Asakawa.

The package will be delivered more quickly, flexibly, and forcefully to the governments and the private sector in our developing member countries to help them address the urgent challenges in tackling the pandemic and economic downturn, Asakawa added.

The funding agency's most recent assessment earlier this month has estimated the global impact of the pandemic to about 2.3-4.8 percent of the gross domestic product (GDP), wherein the regional growth forecast for the Asia and Pacific is forecast to decline to 2.2 percent during 2020 from 5.2 percent in the last year.

ADB's new package of $20 billion includes the establishment of a COVID-19 Pandemic Response Option under ADB's Countercyclical Support Facility.

Up to $13 billion will be provided through this new option to help governments of developing member countries implement effective counter-cyclical expenditure programmes to mitigate impacts of the COVID-19 pandemic, with a particular focus on the poor and the vulnerable, ADB said.

Grant resources will continue to be deployed quickly for providing medical and personal protective equipment and supplies from expanded procurement sources.

"Some $2 billion from the $20 billion package will be made available for the private sector. Loans and guarantees will be provided to financial institutions to rejuvenate trade and supply chains. Enhanced microfinance loan and guarantee support and a facility to help liquidity-starved small and medium-sized enterprises, including those run by female entrepreneurs, will be implemented alongside direct financing of companies responding to, or impacted by, COVID-19," the funding agency said.

The response package includes a number of adjustments to policies and business processes that will allow ADB to respond more rapidly and flexibly to the crisis.

These include measures to streamline internal business processes, widen the eligibility and scope of various support facilities, and make the terms and conditions of lending more tailored, it added.

ADB said that all support under the expanded package will be provided in close collaboration with international organisations, including the International Monetary Fund, World Bank Group, World Health Organisation, UNICEF, and other UN agencies, and the broader global community.

The coronavirus pandemic has so far claimed around 1,15,000 lives globally and has left over 1.8 million people infected.