ADB’s $20 Billion COVID-19 Pandemic Response: Frequently Asked Questions
Article | 20 April 2020
1. What is ADB doing to combat the COVID-19 pandemic?
On 13 April 2020, ADB announced a $20 billion package to address the needs of its developing member countries (DMCs) as they respond to the COVID-19 pandemic. The package triples the $6.5 billion assistance announced on 18 March 2020 by making available additional regular loan resources of $13 billion for countercyclical expenditure financing to help counter the severe macroeconomic impacts stemming from the COVID19 pandemic. The $20 billion package includes about $2.5 billion in concessional and grant resources. Some $2 billion will be made available for the private sector. Loans and guarantees will be provided to financial institutions to rejuvenate trade and supply chains. About $6.2 billion of the total package will be generated from re-programming, reallocations, and savings on existing projects and technical assistance (TA).
Summary of the Available Resources to Support COVID-19 Response in DMCs
|Financing Sources||Sovereign Operations||Nonsovereign Operations|
|(i) Mobilizing additional resources including:||$13.8 billion (ADF, COL, regular OCR, TASF, APDRF)|
|Regular OCR (LIBOR-based loans generally made to DMCs with adequate creditworthiness)||$13 billion*|
|$704 million, of which
||$50 million, of which
|(ii) Re-programming (freeing up resources where project delays and slippage are envisaged due to the outbreak)||$3.7 billion, of which
||$1.6 billion, of which
|(iii) Re-allocation of funds (from projects already under implementation)||$366 milliona, of which
||$200 million (Supply Chain Financing Program)|
|(iv) Savings (amounts committed but unused) and cancellations from portions of existing projects||$281 million, of which
|(v) Using existing grant resources||$38.4 million, of which
|Total||$18.2 billion||$1.8 billion|
|Total package||$20 billion|
* Denotes resources additional to ADB’s initial $6.5 billion package. a Estimated and ongoing process.
- ADF = Asian Development Fund
- APDRF = Asia Pacific Disaster Response Fund
- COL = Concessional OCR lending
- OCR = Ordinary Capital Resources
- TASF = Technical Assistance Special Fund
2. What are ADB’s priorities in COVID-19-related assistance?
Beside providing emergency responses such as the procurement of medical equipment and supplies, ADB support will address the mid- to long-term economic impact of COVID19 transmitted through various channels, including adverse effects on people's health, sharp declines in consumption and investment, lower tourism and exports, and disruptions in trade and production. Examples include:
- Purchasing medical supplies for disease containment and testing;
- Supporting urgent response measures to prepare for, or control the health-related impacts of the COVID-19 pandemic;
- Enhancing disease detection and response capacities;
- Strengthening government’s capacities in response to health emergencies;
- Providing select private firms, microfinance institutions, and small- and medium enterprises with access to working capital;
- Ensuring sufficient trade and supply chain financing is available as the global economy experiences a major economic shock from the pandemic;
- Addressing the pandemic’s economic and financial impact; and
- Supporting various government measures targeted at poor people and vulnerable groups affected by COVID-19 through job loss and healthcare needs.
3. To which countries will the funds be allocated and how quickly can they get the support?
All DMCs have access to ADB’s response package, and allocation will be based on demand and ADB’s assessment of the readiness of proposed activities. ADB is in active dialogue with country authorities to identify the needs for ADB support. ADB aims to process the identified projects and programs as soon as possible to provide rapid support. Approved at the same time as the package, there are a number of changes to policies and business processes that will allow ADB to respond more rapidly and effectively 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.
4. What assistance has been approved from the $20 billion package?
ADB has provided more than $6.4 billion in sovereign projects as of 29 May, including nine CPROs totaling $5.5 billion, and signed $1.8 billion in cofinancing as follows:
$1.5 billion in financing for Indonesia (April 23) for the COVID-19 Active Response and Expenditure Support (CARES) Program. This will support the government’s stimulus package geared to expand social assistance programs, and boost resources for COVID-19 prevention and control. Cofinancing of $750 million from AIIB was signed on 18 May and approved by AIIB on 20 May.
$1.5 billion to the Philippines (April 23) for a CARES program that will help the government increase its funding for social protection to 18 million families, small business relief assistance including wage subsidies to 3.4 million employees, and wider health measures.
A $1.5 billion loan to the Government of India (28 April) to support immediate priorities such as disease containment and prevention, as well as social protection for the poor and economically vulnerable sections of society.
A $20 million loan for Bhutan (4 May) for livelihood support and relief measures for vulnerable groups, including displaced employees, unemployed people, and self-employed individuals in the informal sector.
A $50 million package for the Kyrgyz Republic (4 May) to support the government’s immediate priorities to contain the spread of the pandemic, ensure social protection, and deliver stimulus to safeguard small and medium-sized enterprises (SMEs).
ADB on 7 May approved $500 million for Bangladesh to help alleviate fiscal strain, expand social safety nets, and provide increased salary support to export-oriented manufacturing industry workers and low interest loans to SMEs, industrial sectors and farmers, benefiting over 15 million people. ADB will also provide a $1 million TA grant. Cofinancing of $250 million from AIIB was signed on 18 May and approved by AIIB on 20 May.
A $100 million loan to Mongolia on 12 May to provide essential medical equipment and supplies, improve infection prevention and control standards in hospitals across the country, and support social protection measures targeting poor and vulnerable groups, households, and small businesses.
A $250 million concessional loan to Nepal on 26 May to help the government expand COVID-19 testing capacity, establish quarantine facilities, and extend its social protection program, to include distribution of food assistance and provision of employment support to the unemployed poor. Subsidized lending will be extended to affected micro, small, and medium-sized enterprises.
A $100 million loan for Georgia on 28 May will provide budget support to the government and help fund its comprehensive anti-crisis plan. This includes tax deferments for more than 4,000 small and medium-sized tourism businesses and subsidized loan repayments for at least 2,000 small and medium-sized hotels. The loan will also help fund the government’s social assistance measures. To help contain the spread of the disease, the loan will help to fund free access to COVID-19 diagnostic and treatment services including for the poor.
5. What other COVID-19 assistance has ADB given?
Since the very early stages of the COVID-19 outbreak, ADB has made several targeted interventions to help its DMCs take immediate action to respond to the challenge. It provided rapid support to some affected DMCs for emergency purchase of personal protective equipment, including gloves, medical masks, goggles or face shields, and gowns, and supplies for strengthening public health measures (e.g., soap, sanitizer, handheld no-touch thermometers, and thermal imaging cameras).
To date (29 May), ADB has provided technical assistance and quick-disbursing grant resources to 40 developing member countries totaling $81 million, including $4.6 million in technical assistance cofinancing. This has been done in close collaboration with a wide range of partners such as the World Health Organization, UNICEF, Centers for Disease Control and Prevention in the US and People’s Republic of China (PRC), the International Monetary Fund, and other multilateral development banks.
ADB’s response has also included quick-disbursing grants from the Asia Pacific Disaster Response Fund (APDRF) of up to $3 million each to meet immediate expenses. So far, 10 countries have received grants totaling $11.5 million.
Country-specific support for medical equipment, management, and surveillance of diseases is also being given via reallocation of resources within ongoing projects or through new projects.
For example, ADB repurposed on 9 April $50 million from Pakistan’s National Disaster Risk Management Fund (NDRMF) to support the government’s preventive and response efforts. ADB approved on 30 April a $100 million loan to support the Government of Bangladesh in its efforts to address the immediate public health requirements of COVID-19. ADB also approved on 27 April a $200 million loan to the Philippines to provide emergency cash subsidies to vulnerable households. On 7 May, ADB approved $30 million in extra financing for a health sector project in Mongolia to further strengthen the country’s preparedness and response and on 25 May a $20 million to the Lao PDR as additional financing to the Greater Mekong Subregion Health Security Project.
On 11 May 2020, ADB extended a $40 million grant to Afghanistan that will help increase the country’s capacity to manage the COVID-19 pandemic, strengthen hospital facilities, acquire vital medicines, and train thousands of frontline health workers.
On 19 May, ADB approved a $300 million emergency assistance loan for Pakistan that will support the purchase of emergency medical supplies and equipment, upgrade medical facilities, train health workers, and provide cash assistance to the poor and vulnerable through the government’s Ehsaas scheme.
We have provided to date (29 May) $658 million in financing to the private sector. Using our existing fast-track approval process for nonsovereign operations, we approved on 20 February 2020 a private sector loan of up to $18.6 million equivalent to a pharmaceutical distributor based in Wuhan, PRC, to enable the continued supply of essential medicines and personal protective equipment.
On 12 March 2020, ADB made available $200 million through ADB’s Supply Chain Finance Program for companies manufacturing and distributing medicines and other items needed to combat COVID-19. Through its partner financial institutions, ADB can provide essential working capital to such companies.
On 31 March 2020, ADB and China Gas Holdings Ltd. signed a $20 million private sector loan agreement to support natural gas and liquefied petroleum gas deliveries to households, hospitals, industry, and services in Wuhan and other affected areas in Hubei province, PRC.
On 6 May, ADB announced a guarantee for a $25 million trade loan to the State Pharmaceuticals Corporation of Sri Lanka to purchase medical supplies. ADB’s Trade Finance Program guaranteed 85% of the trade loan extended by Standard Chartered Bank to the state-owned People’s Bank and onwards to SPC to support its import of these critical medical goods.
The Trade Finance Program has supported more than 1,215 transactions valued at about $818 million, including $591 million from ADB’s own resources and $227 million in cofinancing.