Address by Masatsugu Asakawa, President, Asian Development Bank, to the Board of Governors Business Session, at the 56th Annual Meeting, 4 May 2023, Incheon, Republic of Korea
Members of the Board of Governors:
Welcome to this Business Session of ADB’s Annual Meeting. I thank the Chair of our Board of Governors, His Excellency Kyungho Choo. And I thank the Government of the Republic of Korea for hosting these meetings.
When we met in September last year, I said that we were preparing carefully to support our developing member countries (DMCs) through new uncertainties on their path to recovery. It is vital that we meet the new challenges that have confronted Asia and the Pacific.
Food and energy prices have declined from their peak. However, there remains a risk of an escalation from the Russian invasion of Ukraine, which could cause a renewed surge in commodity prices and stoke global inflation and further monetary tightening. Higher debt and interest rates have also magnified the risks to financial stability. This can be seen in the banking sector issues experienced recently in the US and Europe.
To better support our DMCs, ADB is actively evolving our mission, increasing our resources, and undertaking organizational reforms. We are especially committed to investing in global and regional public goods, to help mitigate the increasing global threats.
I. ADB operations in 2022
Let me summarize how our performance in 2022 reflected these efforts.
In 2022, ADB committed $20.5 billion in loans, grants, equity investments, guarantees, and technical assistance. Our overall commitments were lower than in 2021, while we focused on improving project readiness and quality. As a result, ADB expects higher commitments in 2023.
In 2022, we saw ADB’s highest-ever climate finance commitments, reaching $6.7 billion. Our commitments for food security investments were $3.7 billion, more than double compared to 2021. ADB's Private Sector Operations Department committed $3.9 billion, with a continued increase in nonsovereign cofinancing amounting to $7 billion. Gender mainstreaming in ADB operations reached its highest level, with 97% of our committed operations supporting gender equality. Asian Development Fund (ADF) commitments reached $938 million in 2022, nearly triple the commitment in 2021.
ADB also designed, and raised funds for, the Innovative Finance Facility for Climate in Asia and the Pacific, IF-CAP, which will mobilize unprecedented new levels of climate finance through guarantees and grants.
II. Meeting the region’s evolving needs
Let me turn now to the work that lies ahead.
ADB is preparing carefully to address new challenges. The midterm review of Strategy 2030 will address the MDB evolution agenda. This will enable ADB to invest in global public goods.
Allow me to stress three important operational directions.
First, ADB will increase lending resources and enhance private capital mobilization to support DMCs facing various crises. The ongoing review of our Capital Adequacy Framework will prepare us to optimize our balance sheet and, potentially, boost our lending capacity.
Through high-quality policy-based lending and other modalities, ADB will provide countercyclical support and emergency assistance. This will help DMCs manage crises and undertake reforms that build resilience—for example, through improved domestic resource mobilization.
Under ADB’s new operating model, our “private sector development shift” will promote market-based development. We will catalyze even more private capital through deeper coordination between our sovereign and nonsovereign operations.
Second, as the climate bank for Asia and the Pacific, ADB will provide innovative finance, knowledge, and partnerships. ADB is launching IF-CAP at this Annual Meeting. We are developing a Climate Change Action Plan to transform our operations in support of the climate goals of our DMCs. And, we are piloting the Energy Transition Mechanism to retire or repurpose coal and other fossil fuel power assets.
ADB will also continue to promote regional cooperation and integration, which are critical for investing in global public goods such as climate change mitigation and adaptation.
Third, ADB will continue to prioritize our developing members and populations most in need. Social protection measures for poor and vulnerable groups, and focus on the needs of women and girls, are essential. So is the need to build resilient and sustainable food systems. And, our lower income, conflict-affected, and small-island developing members, which face heightened vulnerabilities, should not be left behind.
So, I ask for your support to secure additional concessional resources for ADF 14.
Before I conclude, let me emphasize that ADB’s strength lies in our ability to evolve to meet new challenges.
We will work closely with Board working groups. And we appreciate that, with the Governors’ proactive leadership, one third of our board members are female. Let us continue to build on this progress. Our dedicated staff, and the deep trust we have built with our members, will ensure a successful transformation in the coming year.
I thank you, Governors, for your continued support on this journey as we work together to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific.