B Loans are funded by commercial banks and other eligible financial institutions with ADB acting as lender of record. A direct ADB loan (A Loan) is required in the project to fulfill ADB’s direct participation requirement.
Although B Loans do not provide co-financiers with recourse to ADB for debt service, such loans do enjoy the same privileges and immunities as ADB’s direct or A Loans, including:
- exemption from restrictions on currency conversions and on remittance of interest payments and repatriation of principal,
- exemption from withholding taxes,
- reduced likelihood of rescheduling in the event of an external debt crisis in the borrowing country, and
- exemption from country provisioning requirements (where applicable).
Other benefits include ADB's:
- project appraisal,
- supervision and monitoring of project implementation, and
- loan administration services.
Reputable commercial financial institutions not incorporated or residing in the country of the borrower or project can participate as a B Loan lender.