ADB signs $2.75b sustainable infrastructure agreement

The Asian Development Bank (ADB) has entered into a partnership with ten major global insurers to raise up to $2.75 billion in private capital to bolster ADB’s financing for sustainable development in Asia and the Pacific.

The Master Framework Agreement for Sustainable Infrastructure supports the expansion of the private sector in the region and enables ADB to enhance its lending capacity to projects by utilising credit insurance.

The partnership was established with top-rated insurers such as Tokio Marine Group, Chubb, AXA XL, Liberty Specialty Markets, Coface, Swiss Re, Everest, AXIS Capital, The Hartford, and Allianz Trade. These insurers will assist in reducing the risk associated with a portion of ADB’s loans for sustainable infrastructure projects.

This collaboration enables ADB to shift credit risk from its portfolio to the insurers’ balance sheets, thereby releasing ADB’s capital, managing its risks, and enhancing its ability to lend, as per an official statement.

“By transferring credit risk to global insurers, ADB boosts its lending capacity and creates a replicable model for reducing infrastructure investment risks in emerging markets,” said ADB Vice-President Bhargav Dasgupta.

Attribution: Amwal Al Ghad English

Subediting: M. S. Salama