Under the arrangement, Sida will guarantee a repayment of principal of up to $155 million of ADB’s sovereign ordinary capital resources (OCR) portfolio of ongoing loans to support ADB’s sustainable level of lending. The risk transfer was signed on 21 September 2016 pursuant to ADB’s Credit Enhancement Policy.
The purpose of the risk transfer arrangement is to free up capital for priority areas in ADB’s operations. The risk transfer is expected to increase OCR lending capacity by about $50 million per year from 2016 to 2026 for a total of about $500 million. This will enable ADB to increase lending operations in its developing member countries and sustain its overall efforts to eradicate extreme poverty, while enhancing the inclusiveness of its operations.