ADB increased assistance package in combating COVID-19 three times to 20 billion USD, 2 billion USD will be allocated to the private sector
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- Category: Digest
ADB increased its response package to the new coronavirus disease pandemic (COVID-19) by three times to $20 billion, and approved measures to optimize its activities in order to provide assistance, the bank’s press service informed.
This increases ADB’s initial $6.5 billion assistance package announced on March 18 by an additional $13.5 billion to help ADB developing countries cope with the serious macroeconomic and health effects of COVID-19. The $20 billion package includes about $2.5 billion in preferential and grant resources.
According to the latest ADB estimate released on April 3, 2020, the global impact of the pandemic will have a gross domestic product decline of 2.3-4.8%. Regional growth is projected to decline from 5.2% last year to 2.2% in 2020.
The new package includes the creation of the COVID-19 Pandemic Response Option as part of the ADB Countercyclical Support Mechanism. As part of this new option, up to $13 billion will be allocated to assist developing country governments in implementing effective countercyclical spending programs to mitigate the effects of the COVID-19 pandemic.
About $2 billion from a package of $20 billion will be allocated to the private sector. Loans and guarantees will be provided to financial institutions for the restoration of distribution networks and supply chains. There will be enhanced support in the form of microfinancing and guarantees, as well as a mechanism to assist SMEs, experiencing a lack of liquidity, including run by women entrepreneurs, along with direct funding for companies responding to COVID-19 or affected by the pandemic.
The pandemic response package includes a number of policy and business process adjustments, which include measures to streamline internal business processes, expand the competence and capabilities of various support mechanisms, and take into account local conditions for lending. All support under the enlarged package will be provided in cooperation with international organizations, including International Monetary Fund; World Bank Group, The World Health Organization, UNICEF, and other UN agencies, and the wider world community, the release said.