Haruhiko Kuroda, president of the Asian Development Bank (ADB), announced here on Saturday the lender would establish a US$3-billion emergency loan facility to help developing member countries cope with the financial crisis in 2009-2010.

The mechanism, Countercyclical Support Facility (CSF), would provide emergency loans faster and cheaper under ADB's existing special loan facilities, Kuroda said.

"I believe this will be a very welcome initiative to assist faltering economies and, most importantly, protect the poor from the worst impacts of the crisis," the president said.

The CSF -- pending Board of Directors' approval -- would be available to developing member countries which qualify for loans from ADB's Ordinary Capital Resources (OCR), said Kuroda at a press conference at ADB's 42nd Annual Meeting. The OCR is a pool of ADB funds available for lending to middle-income countries at near market terms.

The CSF announcement comes just two days after the ADB's Board of Governors agreed to triple ADB's capital base from US$55 billion to US$165 billion. The 200 percent increase allows the ADB to substantially increase its support to countries affected by the global downturn. The new facility would form part of that assistance.

The ADB planned to increase its lending assistance by more than US$10 billion in 2009-2010, bringing total ADB assistance for these two years to about US$32 billion. This compares with about US$22 billion in 2007-2008.

The crisis support will include project investments, quick-disbursing policy-based loans, guarantees, and new initiatives designed to address specific crisis needs. The ADB will also expand its support through grants for policy analysis and capacity building.

Export-dependent Asia has been hard hit by slumping demand for its goods in major global economies, such as the US and Europe. A number of governments in the region have boosted spending to spur domestic consumption to counter falling offshore demand, but economies in the region are likely to come under increased pressure.

(Xinhua News Agency May 2, 2009)