Catalog

Policy on Supplementary Financing

ADB adopted a policy on supplementary financing of cost overruns of ADB-financed public sector projects in 1973. The policy was revised in 1983 and 1988 to expand coverage of eligible cost overruns, specify terms of supplementary loans, and introduce some flexibility pertaining to such aspects as macroeconomic considerations, searching for alternative sources of financing, and financing of interest and other charges during construction by ADB.

The revised policy of 2005 intends to enhance development impact of ADB’s operations, improve responsiveness to borrowers’ needs, and reduce transaction costs. The new revision

• expands policy coverage to include private sector operations and investment operations financed by Asian Development Fund grants
• enables ADB to effectively assist borrowers to complete, restructure or expand, where warranted, investment operations
• provides clearer and more detailed due diligence procedures for appraisal of supplementary financing proposals
• streamlines relevant processing procedures

• A Review of the Policy on Supplementary Financing: Addressing Challenges and Broader Needs (November 2005)
• Review of Bank Policy on Supplementary Financing of Cost Overruns of Bank-Financed Projects (January 1988) [ PDF: 2,220kb | 22 pages ]
• Review of the Bank’s Policy on Supplementary Financing of Cost Overruns of Bank-Financed Projects (November 1983) [ PDF: 1,305b | 25 pages ]
• Cost Overruns of Bank-Financed Projects and Supplementary Loans (November 1973) [ PDF: 589kb | 13 pages ]