Asian Development Bank plans lending overhaul, pledges to work with China's AIIB

The Japan-led Asian Development Bank (ADB) has implemented measures that could help it hold its ground as a resource for regional economies, even as China's Asian Infrastructure Investment Bank (AIIB) gains prominence.

The ADB had overhauled a four-decade-old development fund to boost its annual lending and grant approvals by 50 per cent, to as much as US$20 billion, the bank said at its annual meeting in Baku, Azerbaijan. It would also set aside money to support public-private partnership projects and work with the AIIB "for Asia", the ADB said.

"Now that the China-led AIIB is becoming a reality, the Japan-led ADB wants to ensure that it will still remain a key funder for infrastructure programmes in less developed Asia," said Wai Ho Leong, a Singapore-based economist at Barclays. "Given the development needs across Asia, there is sufficient room for both."

For almost 50 years, Asian nations from India to Vietnam and Indonesia have benefited from funding from the ADB, which is dominated by Japan and the United States.

"Chinese authorities say AIIB will not compete but complement ADB," ADB president Takehiko Nakao said after meeting for an hour with Jin Liqun, interim head of the AIIB. "It's good for the Asian region to have more resources."

Nakao reiterated the ADB's readiness to work with AIIB, including co-financing.