The Asian Development Bank's (ADB) Board of Directors has approved the allocation of US$3.4 billion to help Asian countries respond to the global economic crisis, the Manila-based lender said on Tuesday.

Among the total, US$3 billion is used to establish a Counter cyclical Support Facility that will provide short-term, fast-disbursing loans for the ADB's developing member countries to ramp up fiscal spending to cope with the crisis, especially for those that lack financial means to do so amid tight global credit conditions and a sharp increase in funding costs, the development bank said in a press release.

Each qualified member can get a maximum of US$500 million from the facility, ADB said, adding that the fund would be available to the developing members that qualify for loans from the ADB's Ordinary Capital Resources (OCR). The OCR is a pool of ADB funds for middle-income countries to borrow at near market terms.

"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," ADB president Haruhiko Kuroda said earlier when talking about the new facility.

Those that have no access to OCR will benefit from the other part of the allocation. The rest 400 million dollars will go to the Asian Development Fund (ADF). ADF resources are provided in the form of concessional loans and grants to the ADB's low-income developing members with limited debt repayment capacity. The additional ADF resources will be used to provide funds to finance key development investments in low-income countries that are among the most fiscally-constrained in responding to the crisis, the lender said.

Conditions for accessing the US$3-billion facility include a significant slowdown in growth, exports and remittances; fiscal constraints; and difficulty in sourcing finance from international capital markets on favorable terms, the ADB said.

(Xinhua News Agency June 17, 2009)