ASTANA--The Asian Development Bank is boosting its lending power in an effort to accelerate poverty reduction in the region.
Speaking Friday at the opening press conference in the ADB 47th Annual Meeting 2014, President Takehiko Nakao said the bank would reorganize the equity structure of its two lending windows -- the Asian Development Fund and Ordinary Capital Resources.
Under the plan, which is expected to be implemented beginning January 2017, the Asian Development Fund's $33.3-billion equity capital will be folded into the Ordinary Capital Resources' $16.4 billion.
"Poverty reduction can be strengthened" through the move, Nakao said.
The move will give Ordinary Capital Resources, a lending facility focused on middle-income countries, more financial muscle to raise money from bond issuance, among other methods.
The Asian Development Fund will no longer give cheap loans to low-income countries, but it will continue to give grants.
The ADB's enlarged lending capacity could benefit member countries, which can borrow to ramp up infrastructure projects, a key approach in poverty amelioration. The bank will offer the same concessional terms.
The restructuring will also lessen the burden of donors, such as the U.S. and Japan, countries that are working to recover from the global financial crisis.
ADB's move comes as China has started working on a $50-billion Asian Infrastructure Investment Bank, which could potentially compete with the 47-year-old multilateral lender. Nakao said China's infrastructure bank is seen as a complement rather than a threat to ADB's lofty goal of eradicating poverty.
"These are important initiatives because the infrastructure needs of Asia Pacific are huge," Mr. Nakao said during the press conference, adding that the "ADB's resources are limited."
According to Nakao, ADB has about $13 billion in new lending approval for this year, but the infrastructure requirements of the region are estimated at $8 trillion for the next 10 years.
"I understand the reason behind this bank. So it should be welcomed," Mr. Nakao said.
Despite progress in poverty reduction, Asia remains a home to the world's poorest of the poor. Nakao said around 700 million in Asia, or around 60% of the world's poor, are still living below the $1.25 per day absolute poverty threshold.