ADB Annual Report 2008 - Financial Report

ANNUAL REPORT
VOLUME 2|FINANCIAL REPORT
About the Asian Development Bank

ADBs vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries substantially reduce poverty and improve the quality of life of their people. Despite the regions many successes, it remains home to two thirds of the worlds poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.
2009 Asian Development Bank Every effort has been made to ensure the accuracy of the data used in this publication. Variations in data in ADB publications often result from different publication dates, although differences may also come from source and interpretation of data. ADB accepts no responsibility from any consequence of their use. The term country, as used in the context of ADB, refers to a member of ADB and does not imply any view on the part of ADB as to the members sovereignty or independent status. In this publication, $ refers to US dollars. ISSN 306-8370 Printed in the Philippines.
The ADB Annual Report 2008 comprises two separate volumes: Volume 1 is the main report and Volume 2 contains the financial statements and statistical annexes.
ANNUAL REPORT
VOLUME 2|FINANCIAL REPORT
20 08
Contents
FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT AUDITORS
I. Managements Discussion and Analysis Overview Ordinary Capital Resources Special Funds Grant Cofinancing II. Ordinary Capital Resources (OCR) Managements Report on Internal Control over Financial Reporting Report of Independent Auditors OCR-1 Balance Sheet, 31 December 2008 and 2007 OCR-2 Statement of Income and Expenses for the Years Ended 31 December 2008 and 2007 OCR-3 Statement of Cash Flows for the Years Ended 31 December 2008 and 2007 OCR-4 Statement of Changes in Capital and Reserves for the Years Ended 31 December 2008 and 2007 OCR-5 Summary Statement of Loans, 31 December 2008 and 2007 OCR-6 Summary Statement of Borrowings, 31 December 2008 and 2007 OCR-7 Statement of Subscriptions to Capital Stock and Voting Power, 31 December 2008 OCR-8 Notes to Financial Statements, 31 December 2008 and 2007 III. Asian Development Fund (ADF) Managements Report on Internal Control over Financial Reporting Report of Independent Auditors ADF-1 Special Purpose Statement of Assets, Liabilities and Fund Balances, 31 December 2008 and 2007 ADF-2 Special Purpose Statement of Revenue and Expenses for the Years Ended 31 December 2008 and 2007 ADF-3 Special Purpose Statement of Cash Flows for the Years Ended 31 December 2008 and 2007 ADF-4 Special Purpose Statement of Changes in Fund Balances for the Years Ended 31 December 2008 and 2007 ADF-5 Special Purpose Summary Statement of Loans, 31 December 2008 and 2007 ADF-6 Special Purpose Statement of Resources, 31 December 2008 ADF-7 Notes to Special Purpose Financial Statements, 31 December 2008 and 2007 IV. Technical Assistance Special Fund (TASF) Managements Report on Internal Control over Financial Reporting Report of Independent Auditors TASF-1 Statement of Financial Position, 31 December 2008 and 2007 TASF-2 Statement of Activities and Changes in Net Assets for the Years Ended 31 December 2008 and 2007 TASF-3 Statement of Cash Flows for the Years Ended 31 December 2008 and 2007 TASF-4 Statement of Resources, 31 December 2008 TASF-5 Summary Statement of Technical Assistance Approved and Effective for the Year Ended 31 December 2008 TASF-6 Notes to Financial Statements, 31 December 2008 and 2007 6 7 24 30
33 34 36 38 39 40 42 44 46 48
71 72 74 75 76 77 78 80 81
89 90 92 93 94 95 96 97
V. Japan Special Fund (JSF) Managements Report on Internal Control over Financial Reporting Report of Independent Auditors JSF-1 Statement of Financial Position, 31 December 2008 and 2007 JSF-2 Statement of Activities and Changes in Net Assets for the Years Ended 31 December 2008 and 2007 JSF-3 Statement of Cash Flows for the Years Ended 31 December 2008 and 2007 JSF-4 Notes to Financial Statements, 31 December 2008 and 2007 VI. Asian Development Bank Institute Special Fund (ADBISF) Report of Independent Auditors ADBISF-1 Statement of Financial Position, 31 December 2008 and 2007 ADBISF-2 Statement of Activities and Changes in Net Assets for the Years Ended 31 December 2008 and 2007 ADBISF-3 Statement of Cash Flows for the Years Ended 31 December 2008 and 2007 ADBISF-4 Notes to Financial Statements, 31 December 2008 and 2007 VII. Asian Tsunami Fund (ATF) Managements Report on Internal Control over Financial Reporting Report of Independent Auditors ATF-1 Statement of Financial Position, 31 December 2008 and 2007 ATF-2 Statement of Activities and Changes in Net Assets for the Years Ended 31 December 2008 and 2007 ATF-3 Statement of Cash Flows for the Years Ended 31 December 2008 and 2007 ATF-4 Notes to Financial Statements, 31 December 2008 and 2007 VIII. Pakistan Earthquake Fund (PEF) Managements Report on Internal Control over Financial Reporting Report of Independent Auditors PEF-1 Statement of Financial Position, 31 December 2008 and 2007 PEF-2 Statement of Activities and Changes in Net Assets for the Years Ended 31 December 2008 and 2007 PEF-3 Statement of Cash Flows for the Years Ended 31 December 2008 and 2007 PEF-4 Notes to Financial Statements, 31 December 2008 and 2007 IX. Regional Cooperation and Integration Fund (RCIF) Managements Report on Internal Control over Financial Reporting Report of Independent Auditors RCIF-1 Statement of Financial Position, 31 December 2008 and 2007 RCIF-2 Statement of Activities and Changes in Net Assets for the Year Ended 31 December 2008 and for the Period 26 February to 31 December 2007 RCIF-3 Statement of Cash Flows for the Year Ended 31 December 2008 and for the Period 26 February to 31 December 2007 RCIF-4 Notes to Financial Statements, 31 December 2008 and 2007 X. Climate Change Fund (CCF) Managements Report on Internal Control over Financial Reporting Report of Independent Auditors CCF-1 Statement of Financial Position, 31 December 2008 CCF-2 Statement of Activities and Changes in Net Assets for the Period 7 April to 31 December 2008 CCF-3 Statement of Cash Flows for the Period 7 April to 31 December 2008 CCF-4 Notes to Financial Statements, For the Period 7 April to 31 December 2008
101 102 104 105 106 107
111 112 113 114 115
121 122 124 125 126 127
130 131 133 134 135 136
139 140 142 143 144 145
148 149 151 152 153 154
STATISTICAL ANNEXES
1 2 3 4 5 6 7 8 9a 9b 10 11 12 13 14 Sovereign and Nonsovereign Loan Approvals by Country, 2008 Grant-Financed Project Approvals by Country, 2008 Loan Approvals by Sector: 3-Year Moving Averages, 1968-19702006-2008 Loan Approvals by Sector, 2008 Sectoral Distribution of Loans, 2008, 19672008 Sectoral Distribution of Grants, 2008, 19682008 Loan and ADF Grant Approvals, by Country and Source of Funds, 2008 Projects Involving Conancing, 2008 Loan Disbursements, 2007 and 2008 Program Loan Disbursements, 2008 Trends in Program Lending and Grant, 19982008 Nonsovereign Approvals and Total Project Costs by Country, 2008 Nonsovereign Approvals and Total Project Costs by Sector, 2008 Nonsovereign Approvals by Year, 19832008 Nonsovereign Approvals by Country, 19832008 Number of Loans and Projects Approved and Under Administration, Project Completion Reports (PCRs) Circulated, Projects Completed, Loans Closed, and Project/Program Performance Evaluation Reports (PPERs) Circulated Amount of Loans Approved, Contracts Awarded, and Disbursements Technical Assistance Grant Approvals by Country and Regional Activities, 19672008, 2007, 2008 Technical Assistance Grant Approvals, 2008 Technical Assistance Grant Approvals by Sector, 19672008, 2007, 2008 Consulting Services Financed Through Loans by Sector, 2008 Regional Technical Assistance Activities, 2008 Net Transfer of Resources (Ordinary Capital Resources and Asian Development Fund), 20062008 Net Transfer of Resources (Ordinary Capital Resources and Asian Development Fund), 19992008 Asian Development Fund Resources and Commitment Authority Technical Assistance Special Fund Japan Special FundRegular and Supplementary Contributions Japan Special FundAsian Currency Crisis Support Facility Japan Fund for Poverty Reduction, 2008 Projects with ADB-Administered Grant Financing, 2007 Approvals Contracts Awarded by Country of Origin, 2008: Project LoansOrdinary Capital Resources Contracts Awarded by Country of Origin, 2008: Project LoansAsian Development Fund Contracts Awarded by Country of Origin, 2008: Project LoansOrdinary Capital Resources and Asian Development Fund Combined Estimates of Payment to Supplying Countries for Foreign Procurement Under Program Lending, 2008 Cumulative Contracts Awarded, By Country of Origin: Technical Assistance Operations Contracts Awarded by Country of Origin, 20062008 159 163 165 166 169 169 170 171 174 174 175 175 176 176 177
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34
178 180 182 184 193 193 194 199 200 201 202 203 203 204 205 209 210 211 212 213 214
Asian Development Bank
MANAGEMENTS DISCUSSION AND ANALYSIS

The Asian Development Bank (ADB) is an international development financial institution whose vision is to make Asia and the Pacific free of poverty. ADB was established in 1966 through the Agreement Establishing the Asian Development Bank (the Charter), ratified by 31 countries to promote the social and economic development of the region and reduce poverty. As of 31 December 2008, ADB had 67 members, 48 of which are in the region.
Annual Report 2008
ADB provides various forms of financial assistance to its developing member countries. The main instruments are loans, technical assistance, grants, guarantees, and equity investments. These instruments are financed through ordinary capital resources (OCR), Special Funds, and various trust funds. OCR and Special Funds are used to finance operations that are solely under ADB administration. Trust funds are externally funded and are administered by ADB on behalf of donors. The Charter requires that funds from each resource be kept separate from the others. ADB also provides policy dialogues and advisory services and mobilizes financial resources through its cofinancing operations tapping official, commercial, and export credit sources to maximize the development impact of its assistance. Cofinancing for ADB projects can be in the form of external loans, grants for technical assistance and components of loan projects, and credit enhancement products such as guarantees and syndications.
Basis of Financial Reporting

Statutory Reporting. ADB prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. Table 1 presents selected financial data for 2008. ADB manages its balance sheet by selectively using derivatives to minimize the interest rate and currency risks associated with its financial assets and liabilities. Derivative instruments are used to enhance asset and liability management of individual positions and overall portfolios, and to reduce borrowing costs. Financial instruments including all derivatives, structured and swapped borrowings, and marketable investments are recorded at their fair value while loans and unswapped borrowings are recorded at carrying book value. Non-marketable equity investments are valued either at cost less any permanent impairment, or using the equity method. ADB complies with Financial Accounting Standards (FAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, along with its related amendments (collectively referred to as FAS 133), including FAS 155 (Accounting for Certain Hybrid Financial Instruments, an amendment to FAS 133 and 140). Effective 1 January 2008, ADB also adopted FAS 157, Fair Value Measurements, and FAS 159, The Fair Value Option for Financial Assets and Financial Liabilities (including an amendment of Financial Accounting Standards Board Statement No. 115). FAS 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives), and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. FAS 133 allows hedge accounting only if certain qualifying criteria are met. An assessment of those criteria indicated that most of ADBs derivative transactions are highly effective in hedging the underlying transactions and are appropriate for reducing funding costs. Compliance with hedge accounting requirements will impose undue constraints on future borrowings, loans, and hedge programs and will likely detract ADBs efforts to effectively and efficiently minimize the funding costs for its borrowing member countries. Accord-
ORDINARY CAPITAL RESOURCES

Funding for OCR operations comes from three distinct sources: funds borrowed from private placements and capital markets, paid-in capital provided by shareholders, and accumulated retained income (reserves). The financial strength of OCR is largely based on the support of shareholders and on financial policies and practices. Shareholder support is reflected in the form of capital backing from members and in the record of borrowing members in meeting their debt service obligations. Borrowed funds, together with equity, are used to fund OCR lending and investment activities as well as other general operations. Loans are generally made to developing member countries that have attained a higher level of economic development and to private and other nonsovereign borrowers. Sovereign loans are priced on a cost pass-through basis in which the cost of funding the loans plus a lending spread is passed through to the borrowers. Nonsovereign loans are priced based on market practice. In addition to direct lending, ADB also provides guarantees to assist governments of developing member countries and nonsovereign borrowers secure commercial funds for ADB-assisted projects. ADB experienced a strong and growing demand for guarantees as credit enhancement products.
TABLE 1: Selected Financial Data

(31 December, amounts in $ Million)
Statutory Basis 2008 Revenue and Expenses From Loan From Investments From Guarantees From Equity Investments From Other Sources Total Revenue Borrowings and Related Expenses Administrative Expenses
a
2007
2006
2005
2004
1,358.0 677.2 6.9 3.7 18.7 2,064.5 1,208.4 141.0 8.4 (3.5) 6.3 1,360.6 (28.1) 450.6 1,126.3 50,394 2.24% 3.84% 3.20% 4.11%
1,442.3 683.2 5.1 58.9 18.8 2,208.3 1,389.8 127.3 (0.7) (0.6) 4.0 1,519.8 22.9 53.8 765.2 42,780 1.79% 5.00% 4.68% 4.32%
1,210.1 564.5 4.1 41.5 18.7 1,838.9 1,116.3 127.7 (1.2) (32.5) 3.7 1,214.0 80.6 (135.4) 570.1 37,904 1.50% 4.98% 4.18% 4.81% Pre-FAS 133/159d Basis
1,036.3 377.4 4.1 3.3 11.3 1,432.4 893.2 135.7 (3.4) (3.5) 4.2 1,026.2 16.9 (309.2) (4.6) 109.3 36,092 0.30% 4.35% 2.96% 5.04%
1,038.3 265.6 3.5 (0.7) 6.4 1,313.1 861.7 118.3 (2.4) 2.2 3.1 982.9 59.4 41.0 430.6 36,364 1.18% 4.16% 2.21% 3.37%
Technical Assistance to Member Countries Provision for Losses Other Expenses Total Expenses Net Realized (Losses) Gains Net Unrealized Gains (Losses) Cumulative Effect of Change in Accounting Principle Net Income Average Earning Assetsb Annual Return on Average Earning Assets Return on Loans Return on Investments Cost of Borrowings
Net Income Average Earning Assetsb Annual Return on Average Earning Assetsc Return on Loans Return on Investments Cost of Borrowings
699.7 50,443 1.39% 4.14% 3.70% 3.29%
711.4 42,757 1.66% 5.14% 4.72% 4.68%
705.5 37,859 1.86% 4.94% 4.27% 4.31% Current Value Basis
415.6 36,076 1.15% 4.35% 2.99% 3.75%
389.6 36,306 1.07% 4.16% 2.34% 3.58%
Net Income Average Earning Assetsb Annual Return on Average Earning Assets Return on Loans Return on Investments Cost of Borrowings
( ) = negative, FAS = Financial Accounting Standards.
101.9 51,575 0.20% 9.18% 3.51% 7.17%
1,159.0 43,726 2.65% 6.40% 7.77% 5.32%
544.1 39,130 1.31% 2.58% 5.48% 3.51%
93.7 37,948 0.23% (1.18%) (1.11%) (1.34%)
562.8 39,391 1.47% 4.25% 3.51% 3.56%
a Net of administration expenses allocated to the Asian Development Fund and loan origination costs that are deferred. b Composed of investments and related swaps, outstanding loans (excluding net unamortized loan origination cost/front-end fees) and related swaps and equity investments. c Represents net income before net unrealized gains/losses on derivatives, over average earning assets. d FAS 159 is applicable to 2008 only.
ingly, ADB elects not to adopt hedge accounting and reports all derivative instruments on the balance sheet at fair value while recognizing changes in the fair value of derivative instruments for the year as part of net income.
FAS 155 allows fair value measurement for hybrid financial instruments that contain embedded features that would otherwise be required to be treated as a separate derivative instrument (bifurcated) in the reported finan-
Annual Report 2008
TABLE 2: Condensed Current Value Balance Sheets as at 31 December 2008 and 2007
($ Thousand)
31 December 2008 Statutory Basis

Due from banks Investments and accrued income Securities transferred under repurchase agreement Securities purchased under resale arrangement Loans outstanding and accrued interest Provision for loan losses and unamortized net loan origination costs Equity investment Receivable from members Receivable from swaps Borrowings Others Other assets TOTAL Borrowings and accrued interest Payable for swaps Borrowings Others Payable under securities repurchase arrangement Accounts payable and other liabilities Total Liabilities Paid-in capital Net notional maintenance of value receivable Ordinary reserve Special reserve Loan loss reserve Surplus Cumulative revaluation adjustments account Net incomeb 31 December 2008 Net incomeb 31 December 2007 Accumulated other comprehensive income Total Equity TOTAL (564,383) 9,532,487 209,723 195,062 894,594 (23,336) 1,119,473 227,500c (98,721) 15,269,470 $ 78,721,752 1,194 23,336 (426,647) (227,500) (74,710) (704,327) $ (2,406,965) (564,383) 9,533,681 209,723 195,062 894,594 692,826 (173,431) 14,565,143 $ 76,314,787 $ 877,280 (597,852) 173,431 452,859 3,977,890 (564,383) 10,410,961 209,723 195,062 894,594 94,974 15,018,002 $ 80,292,677 301,759 1,057,481 63,452,282 3,777,071 (1,702,638) 301,759 1,057,481 61,749,644 3,777,071 3,525,031 301,759 1,057,481 65,274,675 3,777,071 24,867,815 1,198,781 (1,347,193) (361,357) 23,520,622 837,424 1,347,193 361,357 24,867,815 1,198,781 23,831,087 882,793 504,936 $ 78,721,752 $ 36,026,446 (2,237,329) (163,125) $ (2,406,965) $ 5,912 21,593,758 719,668 504,936 $ 76,314,787 $ 36,032,358 $ $ 2,237,329 163,125 3,977,890 1,816,481 23,831,087 882,793 504,936 $ 80,292,677 $ 37,848,839 511,756 36,150,156 59,088 641,427 144,514 (451) (6,060) 511,756 36,149,705 59,088 635,367 144,514 1,622,166 6,060 (50,790) 511,756 37,771,871 59,088 641,427 93,724 309,358 309,358 309,358 $ 142,238 15,544,399
31 December 2007 Current Value Basis

$ 142,238 15,544,399
Reversal of FAS 133/159 Effectsa

$
PreFAS 133/159 Basis

$ 142,238 15,544,399
Current Value Adjustments

$
Current Value Basis

$ 108,821 13,440,728
5,041,387
427,132 31,434,283 27,087 808,157 105,027
17,968,867 512,089 463,793 $ 70,337,371 $ 32,023,669
16,936,964 583,320
5,092,316 722,402 55,358,671 3,842,293
(661,197) 9,642,454 202,847 182,100 616,300 1,153,903 14,978,700 $ 70,337,371
( ) = negative, FAS = Financial Accounting Standards. a Includes reversal of unrealized (gains) losses attributed to equity investments accounted for under equity method. b Net income after appropriation of guarantee fees to Special Reserve. c Cumulative effect of FAS 157/159 adoption to prior years net income.
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cial statements under FAS 133. As of 31 December 2008, ADB holds a relatively small portion of hybrid financial instruments in its borrowing portfolio. FAS 159 expands the scope of financial assets and liabilities that companies may carry at fair value. Effective 1 January 2008, ADB utilized this election to fair value all non-hybrid borrowings that are swapped. As a result of this election, all borrowings that are swapped and their related derivatives are reported at fair value, with changes in fair value reported in earnings. However, ADB still reports all of its loans and those borrowings that are not swapped at amortized cost. FAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements about fair value measurements. In compliance with this standard, and in conjunction with the FAS 159 election above, ADB incorporated its credit risk (as a credit spread) in fair valuing its liabilities. The combined effect of the adoption of FAS 157 and 159 was to increase the opening balance of retained income as at 1 January 2008 by $227.5 million. In March 2008, the Financial Accounting Standards Board (FASB) issued FAS 161 Disclosures about Derivative Instruments and Hedging Activitiesan amendment of FASB Statement No. 133, which requires enhanced disclosures about an entitys derivative and hedging activities and thereby improve the transparency of financial reporting. This statement is effective for financial statements issued for fiscal years and interim periods beginning after 15 November 2008. Supplemental Reporting. Because of the asymmetry created in the financial statements resulting from applying fair value to the derivatives and swapped borrowings, while loans are carried at amortized cost less provision, management believes that the reported income does not appropriately capture the true economic income of ADB. Therefore, ADB has decided to continue issuing two nonUS GAAP supplemental financial reports using current value and pre-FAS 133/159 to better reflect its financial position and risk management. Applications of consistent approaches on these statements allow better analysis for management information and decision making. For current value reporting all financial instruments are measured using a model based on the present value of expected cash flow. The model utilizes market data to determine the cash flow and discount rates for each instrument. Under pre-FAS 133/159, loans, promissory notes,
swapped borrowings, and all derivative instruments are reported at cost.
Discussion and Analysis on Current Value

Table 2 presents estimates of the economic value of OCRs financial assets and liabilities taking into consideration changes in interest rates, exchange rates, and credit risks. Current value reflects the exit price for financial instruments with liquid markets and is the estimated fair value. For financial instruments with no market quotations, current value is estimated by discounting the expected cash flows by applying the appropriate market data. The current value results may differ from the actual net realizable value in the event of liquidation. The reversal of the effects of FAS 133/159 removes its impact, as these effects are part of current value adjustments (Tables 3 and 4).
Current Value Balance Sheet

Loans and Related Swaps. Most loans are made to or guaranteed by ADB members. ADB does not sell its loans believing that there is no market for them. The current value of loans incorporates managements best estimate of expected cash flows including interest. Estimated cash flows from principal repayments and interest are discounted by the applicable market yield curves for ADBs funding cost plus lending spread. The current value also includes an appropriate credit risk assessment. To recognize this inherent risk and other potential overdue payments, the loan value is adjusted through loan loss provisioning. ADB has never suffered a loss on sovereign loans except opportunity losses resulting from the difference between payments for interest and charges not in accordance with the loans contractual terms. The positive adjustment of $1.5 billion indicates that the average interest rates on loans on an after-swap basis are higher than ADB would currently originate on similar loans. Investments and Related Swaps. Under both the statutory and current value bases, investment securities and related derivatives are reported at fair values based on market quotations when available. Otherwise, the current value is calculated using market-based valuation models incorporating observable market data. The net negative adjustment of $68.8 million resulted from unrealized losses on asset swaps due to declining interest rates in related markets.
Annual Report 2008
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Equity Investments. Under both statutory and current value bases, equity investments are reported at fair value when market values are readily determinable; by applying equity method for investments in limited partnership and certain limited liability companies, or for investments where ADB has the ability to exercise significant influence; or at cost less permanent impairment, if any, which represents a fair approximation of the current value. Receivable from Members. This consists of promissory notes that may be restricted by member countries. The current value is based on the cash flow of the projected encashment of the promissory notes discounted using appropriate interest rates. Borrowings after Swaps. The current value of these liabilities includes the fair value of the borrowings and associated financial derivative instruments, and is calculated
using market-based valuation models incorporating observable market data. The $926.3 million unfavorable current value adjustment is due to the fact that the average cost of the borrowings on an after-swap basis is higher than the market rate at which ADB can currently obtain new funding.
Current Value Income Statement

For 2008, the current value net income is $101.9 million compared with pre-FAS 133/159 net income of $699.7 million and statutory reported net income of $1,126.3 million (Table 3). Current Value Adjustments. The total current value adjustment of $597.9 million ($447.5 million in 2007) represents the change in the current value of all ADB financial instruments during the year. The adjustment reflects changes
TABLE 3: Condensed Current Value Income Statements for the Years Ended 31 December 2008 and 2007
($ Thousand) 31 December 2008 Statutory Basis
REVENUE From loans From investments From guarantees From equity investments From other sources - net Total Revenue EXPENSES Borrowings and related expenses Administrative expenses Technical assistance to member countries Provision for losses Other expenses Total Expenses Net realized gains Net unrealized gains Current value adjustments Provision for losses NET INCOME
c
31 December 2007 Current Value Basis Current Value Basis
Reversal of FAS 133/159 Effectsa
PreFAS 133/159 Basis
Current Value Adjustments
1,357,981 677,175 6,876 3,737 18,685 2,064,454
24,055 24,055
1,357,981 677,175 6,876 27,792 18,685 2,088,509
(24,055) (24,055)
$ 1,357,981 677,175 6,876 3,737 18,685 2,064,454
1,442,338 683,212 5,049 58,897 18,835 2,208,331
1,208,391 141,047 8,357 (3,467) 6,272 1,360,600 (28,096) 450,591 $ 1,126,349 $
(450,702)b (426,647) $
1,208,391 141,047 8,357 (3,467) 6,272 1,360,600 (28,096) (111) 699,702
3,467 3,467 24,055 (597,852) 3,467 $ (597,852) $
1,208,391 141,047 8,357 6,272 1,364,067 (28,096) 23,944 (597,852) 3,467 101,850 $
1,389,778 127,327 (683) 3,998 1,520,420 22,905 14 447,543 579 1,158,952
( ) = negative, FAS = Financial Accounting Standards. a Includes reversal of unrealized (gains) losses attributed to equity investments accounted for under equity method. b FAS 133/159 adjustments are reversed as the current value adjustments incorporate the effect of net unrealized losses on derivatives and swapped borrowings under FAS 133 and FAS 159. c Current value adjustments include the effect of FAS 133/159 adjustments and the net unrealized losses on equity investments accounted for under equity method.
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in interest rates, currency exchange rates, and credit risks. This comprised a net unfavorable adjustment of $257.6 million from the change in the valuation of all outstanding financial instruments, $107.6 million from translation adjustments, and $259.8 million adjustment in pension and postretirement benefit liability, offset by $27.2 million net unrealized gains on investments ($251.3 million gain for investments; $224.1 million loss for equity investments) (Table 4). Impact of Changes in Interest Rates. The net decrease in the current value adjustments on the balance sheet during 2008 was $257.6 million. It was a result of the increase in unrealized losses in the borrowing portfolio of $831.1 million, unfavorable results for investments of $89.5 million and equity investments of $24.1 million, offset by increase in unrealized gains for loans of $668.1 million, and decrease in unrealized losses on other assets of $19.0 million. Impact of Changes in Exchange Rates. Translation adjustments, reported under the statutory basis as part of accumulated other comprehensive income, are presented as current value adjustments. The general strengthening of the US dollar against most of the major currencies in 2008 resulted in a negative translation adjustment of $107.6 million compared to a favorable adjustment of $126.8 million in 2007.
TABLE 4: Summary of Current Value Adjustments
($ Thousand)
Operating Activities
In pursuing its objectives, ADB provides financial assistance through loans, technical assistance, guarantees, and equity investments to its developing member countries to help them meet their development needs. This assistance can be provided to sovereign and nonsovereign entities. ADB also actively promotes cofinancing of its development projects and programs to complement its own assistance with funds from both official and commercial sources including export credit agencies. Loans. Until 30 June 2001, ADBs three windows for loans from OCR were the pool-based multicurrency loan, the pool-based single-currency loan in US dollars, and the market-based loan. With the introduction of the LIBORbased loan on 1 July 2001, the pool-based multicurrency loan and market-based loan are no longer offered, and on 1 July 2002, the pool-based single-currency loan in US dollars was retired. Effective January 2004, the pool-based multi currency loans were transformed into pool-based single currency loans in Japanese yen. The LIBOR-based loan is a timely response to borrowers demand for loan products that suit project needs and effectively manage their external debt. LIBOR-based loan products give borrowers a high degree of flexibility in managing interest rate and exchange rate risks and at the same time provide low intermediation risk to ADB. Since November 2002,
Balance Sheet Effects as of 31 December 2008 Loans After Swaps

Total Current Value Adjustments on Balance Sheet Unrealized Gains on Investmentsd Accumulated Translation Adjustments Pension and Post Retirement Benefit Liability Adjustments Total Current Value Adjustments $ 1,492,746
Income Statement Effects Year to Date Less Prior Year Effectsc

$ (710,483)
Investmentsa
$ (62,752)
Borrowings After Swaps

$ (926,345)
Other Assetsb
$ (50,790)
31 December 31 December 2008 2007

$ (257,624) 27,224e (107,617)f (259,835) $ (597,852) $ 148,078 232,792 126,844 (60,171) $ 447,543
( ) = negative, FAS = Financial Accounting Standards. a Relates to investments related swaps and equity investments under equity method. b Relates to receivable from members. c Prior Year Effects include cumulative current value adjustments on all financial instruments and equity investments accounted for under equity method, made in the prior years. d Relates to unrealized gains on investments and equity investments classified as available for sale. e Included in Other Comprehensive Income under statutory basis. f Relates to the translation adjustments for the period and current translation effects from FAS 133/159 reversals.
Annual Report 2008
13
ADB has been offering local currency loans to nonsovereign borrowers and expanded this to sovereign borrowers in August 2005. Loan Approvals, Disbursements, Repayments, and Prepayments. In 2008, the Board of Directors approved 46 sovereign loans totaling $6.9 billion, and 15 nonsovereign loans totaling $1.8 billion, compared with 2007 approvals of 38 sovereign loans totaling $7.3 billion and 22 nonsovereign loans totaling $0.9 billion. Disbursements in 2008 totaled $6.5 billion ($5.9 billion for sovereign loans and $0.6 billion for nonsovereign loans) representing an increase of 25% from the $5.2 billion disbursements in 2007. Regular principal repayments for the year were $1.6 billion ($1.4 billion in 2007) while prepayments amounted to $0.3 billion ($0.1 billion in 2007). In 2008, eight loans were fully prepaid. As of 31 December 2008, the total loans outstanding after provision for losses and net unamortized loan origination cost amounted to $35.9 billion, of which $34.2 billion is for sovereign loans and $1.7 billion is for nonsovereign loans. In 2005, ADB established the multitranche financing facility, a debt financing facility that allows ADB to deliver financial resources for a specific program or investment in a series of separate financing tranches over a fixed period. Financing tranches may be provided as loans, guarantees, equity or any combination of these instruments based on periodic financing requests submitted by the borrower. In 2008, six multitranche financing facilities totaling $4.3 billion (seven multitranche financing facilities totaling $4.0 billion in 2007), were approved under OCR. Periodic financing requests under multitranche financing facilities amounting to $1.8 billion were approved in 2008 ($2.0 billion in 2007). Starting September 2005, ADB provided lending without sovereign guarantee to entities that can be considered public sector borrowers but are structurally separate from the sovereign or central government. Such entities include state-owned enterprises, government agencies, municipalities, and local government units. In 2008, two loans to state-owned enterprises without sovereign guarantee totaling $300 million were approved (one loan for $10 million in 2007). Status of Loans. One nonsovereign loan with an outstanding principal balance of $1.7 million (four loans totaling
$16.5 million in 2007) was in non-accrual status as of 31 December 2008. The $14.8 million decline is mainly attributed to the sale or restructuring of three loans, which were in nonaccrual status. One sovereign loan was restored to accrual status in May 2008, following full settlement of overdue principal and interest. Loan Charges on Sovereign Loans. LIBOR-based loans carry a floating lending rate that consists of 6-month LIBOR and an effective contractual spread fixed over the life of the loan. The lending rate is reset every 6 months on each interest reset date and can be converted to fixed rate at borrowers request. The lending rates for pool-based single-currency loans are based on the previous semesters average cost of borrowings. Interest rates for market-based loans are either fixed or floating. The floating rates are determined based on 6-month LIBOR with reset dates of either 15 March and 15 September or 15 June and 15 December. Effective 2000, all sovereign loans without specific provisions in the loan agreements were charged with lending spread of 60 basis points over the base lending rate. In 2004, 20 basis points of the lending spread were waived on sovereign loans outstanding from 1 July 2004 to 30 June 2005 for borrowers that did not have loans in arrears. Subsequently, the policy was extended to cover the period up to June 2009. In December 2007, the Board of Directors revised the lending rates for all sovereign LIBOR-based loans negotiated on or after 1 October 2007 by reducing the effective contractual spread to 20 basis points over the base lending rate and eliminating the waiver mechanism for such loans. ADBs variable lending rates for pool-based singlecurrency loans in US dollars and in Japanese yen are shown below.
Table 5: Lending Ratesa

(% per annum)
2008 1 January 1.90 6.12 1.98 5.64 2007 1.31 5.91 1.69 6.34 PSCLs Japanese yen US dollar Japanese yen US dollar
1 July
PSCL = Pool-based single-currency loan. a Lending rates are set on 1 January and 1 July every year and are valid for 6 months and are represented net of 20 basis points lending spread waiver.
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ADB also charges a front-end fee of 1% on sovereign loans to cover the administrative costs incurred in loan origination. In 2004, the Board of Governors approved the waiver of the entire front-end fee on all new sovereign loans approved from 1 January 2004 to 30 June 2005. Subsequently, the policy was extended to cover the period up to June 2009. In December 2007, the Board of Directors approved the elimination of front-end fees for sovereign LIBOR-based loans negotiated on or after 1 October 2007. ADB applied a progressive commitment fee of 75 basis points on undisbursed loan balances for sovereign project loans and a flat commitment fee of 75 basis points for sovereign program loans. In October 2006, as part of the enhancement of ADBs loan and debt management products, all sovereign project loans negotiated after 1 January 2007 carried a flat commitment fee of 35 basis points on the full amount of undisbursed loan balances. In April 2007, the Board also approved the waiver of 10 basis points of the commitment charge on the undisbursed balances of sovereign project loans negotiated after 1 January 2007 and 50 basis points of the commitment charge on the undisbursed balances of sovereign program loans. The waiver is applicable to all interest periods starting from 1 January 2007 up to and including 30 June 2009. In December 2007, the Board of Directors approved the reduction of the commitment charge from 75 basis points for sovereign program loans and 35 basis points for sovereign project loans to 15 basis points for both sovereign program and project loans negotiated on or after 1 October 2007, and eliminated the waiver mechanism for such loans. Rebates and surcharges are standard features of sovereign LIBOR-based loans. To maintain the principle of cost pass-through pricing, ADB returns the actual sub-LIBOR funding cost margin to its LIBOR-based loans sovereign borrowers through rebates. A surcharge could arise if ADBs funding cost exceeds the 6-month LIBOR. Rebate or surcharge rates are set on 1 January and 1 July every year and are based on the actual average funding cost margin for the preceding 6 months. Effective 1 July 2007, rebates or surcharges are passed on to the borrowers by incorporating them into the interest rate for the succeeding interest period, rather than retroactively. Based on rebate rates, ADB returned an actual sub-LIBOR funding cost margin of $81.1 million to its LIBOR-based loan sovereign borrowers in 2008 ($38.1 million in 2007).
Table 6: Rebate Rates

(% per annum)
US dollar 1 January 2008 1 July 2008 0.34 0.33 Japanese yen 0.31 0.39
Loan Charges on Nonsovereign Loans. For nonsovereign loans, the lending spread is determined based on market practices, which is intended to cover ADBs risk exposure to specific borrowers and projects. ADB also charges a market-based front-end fee on nonsovereign loans to cover the administrative costs incurred in loan origination. Front-end fees are typically in the range of 1% to 1.5% depending on the transaction. Based on the LIBOR-based lending policy, ADB applies a commitment fee typically in the range of 0.50% to 0.75% per annum on the undisbursed commitment. Local currency loans are priced based on relevant local funding benchmarks or ADBs funding costs and a riskbased spread. Official Cofinancing for Loans. In 2008, $837.6 million from official sources was mobilized in loan cofinancing with partial administration by ADB for four loan projects totaling $752.4 million. Technical Assistance. From 1967 to 1991, technical assistance expenses were charged to OCR and other technical assistance funding resourcesthe Technical Assistance Special Fund (TASF), the Japan Special Fund, and trust or grant funds. From 1992 to 2000, no technical assistance expenses were charged to OCR. In 2001, the Board of Directors approved the financing of high-priority technical assistance programs out of OCR current income within a rolling 4-year financing framework. The amount of financing required varies between years and is subject to the approval of the Board of Directors. In 2003, the Board reverted to the practice of allocating OCR net income to the TASF and of financing technical assistance activities through it and other various funding resources. On an exceptional basis, ADB committed $10.0 million from OCR net income as contribution to the Java Reconstruction Fund in November 2008, for the Yogyakarta and Central Java reconstruction. This was treated as a technical assistance grant in 2008.
Annual Report 2008
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Guarantees. ADB provides guarantees1 as credit enhancements for eligible projects to cover risks that the project and its commercial cofinancing partners cannot easily absorb or manage on its own. Reducing these risks can make a significant difference in mobilizing debt funding for projects. ADB has used its guarantee instruments successfully for infrastructure projects, financial institutions, capital markets, and trade finance. These instruments generally are not recognized in the balance sheet and have off-balance sheet risks. For guarantees issued and modified after 31 December 2002 in accordance with Financial Accounting Standards Board Interpretation No. 45 (FIN 45), Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, ADB recognized at the inception of a guarantee the noncontingent aspect of its obligations. ADBs total exposure on signed and effective loan guarantees is disclosed in Note F of OCR Financial Statements. In 2008, ADB provided $10.0 million for one political risk guarantee operation. Syndications. Syndications enable ADB to mobilize cofinancing by transferring some or all of the risks associated with its loans and guarantees to other financing partners2. Syndications thus decrease and diversify the risk profile of ADBs financing portfolio. Syndications may be on a funded or unfunded basis and may be arranged on an individual, portfolio, or any other basis consistent with industry practices. In 2008, $565.0 million for syndications through B-loans3 was provided for three projects. Equity Investments. In accordance with ADBs Charter which mandates that its nonsovereign operations promote the investment of private capital in the region for development, ADB provides assistance in the form of equity investments, in addition to loans without government guarantees, and other financing schemes. The Charter allows the use of OCR for equity investments in private enterprises up to 10% of its unimpaired paid-in capital together with reserves and surplus, exclusive of special reserves. The total equity investment portfolio for OCR for both outstanding and undisbursed approved facilities
amounted to $911.14 million at end 2008. This represented about 61% of the ceiling defined by the Charter. As of 31 December 2008, the total exposure of nonsovereign operations in equity investments amounted to about $815.0 million. In 2008, seven equity investments totaling $123.1 million were approved compared with five equity investments totaling $79.8 million in 2007. In the same year, ADB disbursed a total of $125.7 million in equity investments, 8.7% increase from $115.6 million disbursed in 2007, and received a total amount of $53.6 million from capital distributions and divestments, whether in full or in part, in 20 projects. The divestments were carried out in a manner consistent with good business practices, after ADBs development role in its investments have been fulfilled, and without destabilizing the companies concerned.
Capital and Resources

Capital. Total shareholders equity on a statutory basis increased from $14.3 billion as of 31 December 2007 to $15.3 billion as of 31 December 2008. This was due primarily to net income for the year of $1.1 billion; the favorable effect of FAS 157/159 adoption to prior years income amounting to $227.5 million; the net effect of change in special drawing rights value on capital and reserves of $33.1 million; and additional capital subscription received of $7.4 million. These were offset by net decrease in other comprehensive income of $276.7 million (adjustment to pension and post retirement benefit obligation of $259.8 million, unfavorable translation adjustments of $43.4 million; and amortization of FAS 133 adjustment of $0.7 million; offset by unrealized gain on investments and equity investments of $27.2 million); and allocations to the Asian Development Fund and Climate Change Fund of $40.0 million each, and to the Technical Assistance Special Fund of $23.0 million. The total authorized and subscribed capital of ADB is 3,546,311 shares valued at $54,890.2 million as of 31 December 2008. Of the subscribed capital, $3,860.6 mil-
1 ADB offers two types of guarantee productspolitical risk and partial creditdesigned to facilitate cofinancing by mitigating risk exposure of commercial lenders and capital market investors. A political risk guarantee covers against specifically defined political risks. A partial credit guarantee provides comprehensive cover (of commercial and political risks) for a specific portion of the debt service provided by cofinanciers. These guarantees are issued for projects in which ADB satisfies its participation requirement. 2 Depending on whether ADB retains risk or not, there may or may not be a contingent liability to ADB. 3 A B-loan is a tranche of a direct loan nominally advanced by ADB, subject to eligible financial institutions taking funded risk participations within such a tranche and without recourse to ADB. It complements an A-loan funded by ADB. 4 Excluding ADBs share on net unrealized gains of investee companies accounted under equity method totaling $6.1 million.
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lion was paid-in and $51,029.6 million was callable. Callable capital can be called only if required to meet ADBs obligations incurred on borrowings or guarantees under OCR. No call has ever been made on ADBs callable capital. To ensure it has adequate risk-bearing capacity, ADB reviews its income outlook annually. Based on that review, the Board of Directors allocates a portion of the previous years net income to reserves to ensure that the level is commensurate with the income planning framework. In addition, to the extent feasible, it allocates part of the net income to support development activities in its developing member countries. In May 2008, the Board of Governors approved the allocation of 2007 net income of $760.2 million to the cumulative revaluation adjustments account for $87.6 million, to loan loss reserve for $13.0 million, to surplus and ordinary reserves for $278.3 million each, to Asian Development Fund and Climate Change Fund for $40.0 million each, and to Technical Assistance Special Fund for $23.0 million. In December 2008, the Board of Directors approved the revised policy on ADBs lending limitation, which limits the total amount of disbursed loans, approved equity investments, and the maximum amount that could be demanded from ADB under its guarantee portfolio, to the total amount of ADBs unimpaired subscribed capital, reserves, and surplus. In addition, the gross outstanding borrowings shall not exceed the sum of callable capital from nonborrowing members, paid-in capital, and reserves (including surplus). As of 31 December 2008, headroom for lending was $29.2 billion and for borrowings, $8.9 billion, based on the new policy (compared with $35.5 billion for lending and $16.4 billion for borrowings as of 31 December 20075). On 6 May, the Board of Directors reported to the Board of Governors on the status of ADBs resources and highlighted the need to initiate a study on financial resources. Accordingly, ADB prepared a working paper that provided the required analysis and context to assess ADBs financial resource position during the implementation period of Strategy 2020, and reviewed all possible avenues for resource mobilization. The working paper was discussed by the Board of Directors on 6 October. The Directors noted that, while the technical issues were well presented in the working paper, the developmental and political issues are equally impor5 Recalculated based on the new policy.
tant to address in the context of the general capital increase and therefore requested the preparation of a second working paper. The second working paper was discussed by the Board of Directors in February 2009. Management is currently reviewing and preparing a proposal on the fifth general capital increase for ADB, which is scheduled for board of directors discussion in April 2009. Borrowings. ADBs primary borrowing objective is to ensure availability of funds at the most stable and lowest possible cost for its operations. Subject to this objective, ADB seeks to diversify its funding sources across markets, instruments, and maturities. To achieve the objective, ADB continued in 2008 a strategy of issuing liquid benchmark bonds to maintain its strong presence in key currency bond markets, and raising funds through opportunistic financing and private placements, such as retail-targeted transactions and structured notes, which provide ADB with cost-efficient funding levels. All proceeds from new funding transactions are invested until they are required for ADBs ordinary operations, including loan disbursements and refinancing of maturing funding obligations. 2008 Funding Operations. During 2008, ADB completed 113 borrowing transactions raising about $9.4 billion in long- and medium-term funds compared with $8.9 billion in 2007. The new borrowings were raised in seven currencies: Australian dollar, Japanese yen, New Zealand dollar, Pound sterling, South African rand, Turkish lira, and US dollar. After swaps, $9.2 billion or 97.6% of the 2008 borrowings were in US dollar, and the remaining $0.2 billion or 2.4% were in Japanese yen. The average maturity of 2008 borrowings was 3.5 years compared with 5.2 years in 2007. Of the total 2008 borrowings, $4.8 billion was raised through 11 public offerings, and 102 private placements amounting to $4.6 billion. In addition, ADB raised $2.9 billion in short-term funds under its Euro commercial paper program to enhance its presence in the market and to meet temporary cash needs. Table 7 shows details of 2008 borrowings compared with borrowings in 2007. Local Currency Bond Issues. ADB continued to pursue its objective of contributing to the development of region-
Annual Report 2008
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Figure 1: Effect on Currency Composition
Currency Composition of Outstanding Borrow ings

(Before Swaps)
Currency Composition of Outstanding Borrowings

(After Swaps)
Other Currenciesa
42.7%
U.S. Dollar 85.1%

U.S. Dollar 47.1%
Other Currencies b
1.8%
Japanese Yen 10.2%
Japanese Yen
13.1%
a Other currencies include Australian dollar, Canadian dollar, Chinese yuan, Euro, Hong Kong dollar, Indian rupee, Kazakhstan tenge, Malaysian ringgit, Mexican peso, New Taiwan dollar, New Zealand dollar, Philippine peso, Pound sterling, Singapore dollar, South African rand, Swiss franc, Thai baht, and Turkish lira. b Other currencies include Chinese yuan, Indian rupee, Kazakhstan tenge, Philippine peso, Pound sterling, and Swiss franc.
Figure 2: Effect on Interest Rate Structures Interest Rate Structure of Outstanding Borrowings (Before Swaps)
Variable
6.6%
Interest Rate Structure of Outstanding Borrowings (After Swaps)

Fixed
14.5%
Fixed
93.4%
Variable
85.5%
Table 7: Borrowings
(Amounts in $ Million)
2008 Long Term Total Principal Amount Average Maturity to First Call (years) Average Final Maturity (years) Number of Transactions Public Offerings Private Placements Number of Currencies (before swaps) Public Offerings Private Placements Short Terma Total Principal Amountb Number of Transactions Number of Currencies 9,372.1 3.5 4.4 11 102 4 6 2007 8,854.3 5.2 9.4 10 84 8 9
al bond markets. Although this years market conditions have not been favorable for ADB to issue local currency bonds, ADB raised about $200 million equivalent through cross-currency swaps to meet local currency funding requirements in Indian rupee, Indonesian rupiah, and Philippine peso. Use of Derivatives. ADB undertakes currency and interest rate swaps to raise, on a fully hedged basis, currencies needed for operations in a cost efficient way while maintaining its borrowing presence in major capital markets. Figures 1 and 2 show the effects of swaps on the interest rate structure and currency composition of ADBs outstanding borrowings as of 31 December 2008. Interest rate swaps are also used for asset and liability management
2,866.6 21 2
3,139.1 24 3
a All euro-commercial papers. b At year-end, the outstanding principal amount was nil in 2008 and 2007.
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Table 8: Year-End Balance of Liquidity Portfolioa

($ Million)
Table 9: Return on Liquidity Portfolio

(%)
Annualized Financial Return 2008 Prudential Liquidity Portfolio Operational Cash Portfolio Cash Cushion Portfolio Discretionary Liquidity Portfolioa Other Portfolio
a Spread over funding cost at 31 December.
2008 Prudential Liquidity Portfolio Operational Cash Portfolio Cash Cushion Portfolio Discretionary Liquidity Portfolio Other Portfolio TOTAL 9,604.5 298.2 2,605.9 2,622.0 626.1 15,756.7
2007 9,209.3 395.1 778.8 2,550.5 645.7 13,579.4
2007 5.84 3.95 4.67 0.28 3.64
a The composition of liquidity portfolio may shift from 1 year to another as part of ongoing liquidity management.
6.43 2.03 2.59 0.44 2.83
purposes to match the liabilities to the interest rate characteristics of loans.
Liquidity Portfolio
The liquidity portfolio helps ensure the uninterrupted availability of funds to meet loan disbursements, debt servicing, and other cash requirements. It also contributes to ADBs earning base. ADBs Investment Authority governs liquid asset investments. Its primary objective is to maintain the security and liquidity of funds invested. Subject to these two parameters, ADB seeks to maximize the total return on its investments. In compliance with its Charter, ADB does not convert currencies for investment; investments are made in the same currencies in which they are received. At present, liquid investments are held in 21 currencies. Liquid assets are held in government and government-related debt instruments, time deposits, and other unconditional obligations of banks and financial institutions, and, to a limited extent, in corporate bonds, mortgage-backed securities, and asset-backed securities of high credit quality. They are held in four subportfoliosprudential liquidity, operational cash, cash cushion, and discretionary liquidityall of which have different risk profiles and performance benchmarks. The yearend balance of the portfolios in 2008 and 2007, including receivables for securities repurchased under resale arrangements, and excluding securities transferred under securities lending arrangements and pending sales and purchases, is presented in Table 8. The prudential liquidity portfolio is invested to ensure that the primary objective of a liquidity buffer is met. Cash inflows and outflows are minimized to maximize the total return relative to a defined level of risk. The portfolio is funded largely by equity, and performance is measured
against external benchmarks with an average duration of about 2.3 years. ADB revised the liquidity policy in October 2006 to bring up to date its financial and risk management policies and practices in line with ADBs business activities and initiatives and to harmonize its liquidity policy with other multilateral development banks. Under the new policy, the duration for the prudential liquidity portfolio can be extended up to 4 years for the portfolio funded by equity. The remaining part of the prudential liquidity portfolio is funded by debt and is invested to maximize the spread earned between borrowing cost and investment income on high-quality investments. The operational cash portfolio is designed to meet net cash requirements over a 1-month horizon. It is funded by equity and invested in short-term, highly liquid money market instruments. The portfolio performance is measured against short-term external benchmarks. The cash cushion portfolio holds the proceeds of ADBs borrowing transactions pending disbursement. It is invested in short-term instruments, and the performance is measured against short-term external benchmarks. The discretionary liquidity portfolio is used to support medium-term funding needs and is funded by debt to provide flexibility in executing the funding program over the medium-term to permit borrowing ahead of cash flow needs and bolster ADBs access to short-term funding through continuous presence in the market.
Table 10: Contractual Cash Obligations

($ Million)
2008 Long-Term Debt Undisbursed Loan Commitments Undisbursed Equity Investment Commitments Guarantee Commitments Other Long-Term Liabilities TOTAL 35,713.5 20,648.5 275.7 1,772.6 712.7 59,123.0 2007 32,187.2 19,011.3 344.0 1,460.6 450.6 53,453.7
Annual Report 2008
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Contractual Obligations
In the normal course of business, ADB enters into various contractual obligations that may require future cash payments. Table 10 summarizes ADBs significant contractual cash obligations at 31 December 2008 and 2007. Long-term debt includes direct medium- and long-term borrowings excluding swaps but does not include any adjustment for unamortized premiums, discounts, or effects of applying FAS 133/159. Other long-term liabilities correspond to accrued liabilities, including pension and postretirement medical benefits.
slightly weakening credit quality. Because some of the low risk borrowers were upgraded in 2008, the small change in the weighted average risk rating understates the impact of the financial crisis and subsequent economic slowdown to some sovereign borrowers. Concentration risk, which occurs when a small group of borrowers account for a large share of the portfolio, is a key concern for ADB. During 2008, ADBs exposure to its three largest sovereign borrowers was essentially constant at 71%.
Table 11: Sovereign Borrower Concentration
As of 31 December 2008 and 2007 (%)
Country 2008 29 24 18 13 11 6 2007 31 25 16 9 13 6 Indonesia China, Peoples Republic of India Pakistan Philippines Others
Note: Figures may not add up to 100 due to rounding.
Financial Risk Management

In its development banking operations, ADB faces various risks including credit, market, liquidity, and operational. Among these risks, sovereign credit risk is the principal risk as loans to developing member countries represent 91% of ADBs operations portfolio with the remaining 9% invested in nonsovereign entities. ADB takes a conservative approach to managing market and liquidity risks. To ensure strong risk-bearing capacity, the institution maintains conservative capital adequacy. The Risk Management Unit independently identifies, measures, monitors, and manages these risks in accordance with industry best practice. The unit is under the Office of the President and reports to the managing director general. The Risk Committee, chaired by the managing director general, provides senior management oversight of the risk management function and makes recommendations on risk policies and actions.
ADB holds provisions to offset known or probable losses in specific transactions and loan loss reserves to offset the average losses that ADB would expect to incur in the course of its lending operations. The sum of provisions and the loan loss reserve represents ADBs expected loss. Following the decline in credit quality, the expected loss for the sovereign portfolio approximately doubled in 2008.
Table 12: Sovereign Portfolio Expected Loss
As of 31 December 2008 and 2007
2008 $ Million % Provision for loan losses Loan loss reserve requirementa Expected Loss 4.4 423.7 428.0 0.0 1.0 1.0 2007 $ Million % 5.7 166.7 172.4 0.0 0.6 0.6
Credit Risk
ADB principally faces three forms of credit risk: sovereign, nonsovereign, and counterparty and issuer. Sovereign. Sovereign credit risk is the risk that a sovereign borrower may default on its loan or guarantee obligations. ADB relies on monitoring, loan loss reserves, and conservative capital adequacy to manage sovereign credit risk. ADB uses a 10-category rating scale to evaluate its sovereign borrowers. During 2008, the weighted average risk rating increased from 4.83 to 4.85, which indicates
a The loan loss reserve requirement is subject to Board of Governors approval during the annual meeting in May 2009. Note: 0.0 is less than 0.05%.
Nonsovereign. Nonsovereign credit risk is the risk that a nonsovereign entity, such as a private-sector firm, stateowned enterprise or local government, may default on its loan or guarantee obligations. These transactions lack the backing of a national government. Management of nonsovereign credit risk begins during the earliest stages of each proposed transaction. In addition to evaluating the development impact, ADB considers a proposals credit strength, corporate management and governance, and financial, commercial, and technical via-
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bility. Not only do the business units undertake this due diligence, but the Risk Management Unit also conducts an independent assessment of each proposed transaction. Currently, ADB uses a 7-scale rating system to evaluate its nonsovereign borrowers. During 2008, average credit quality worsened, and the weighted average credit rating increased from 3.5 to 3.7. The deteriorating macroeconomic conditions in some developing member countries led to the downgrade of firms operating in these environments. ADB uses a variety of limits to manage concentration risk in the nonsovereign portfolio. The total assistance to a single project must not exceed 25% of the total project cost or $250.0 million, whichever is lower. This limit ensures that exposure to a single project or obligor does not exceed 5% of the Board-approved ceiling of $5.0 billion for nonsovereign operations. Furthermore, there are nonsovereign exposure limits for corporate groups, industry subsectors, and countries. ADB must closely monitor country and sector concentrations in the nonsovereign portfolio particularly due to the nature of its development mandate. Although country concentration is still significant, it decreased in 2008 with the three largest country exposures falling from 49% to 42% of the portfolio. Sector concentration was more or less constant. ADB has focused on the energy and finance sectors for their development signifiTable 13: Nonsovereign Country Concentration
Country 2008 Country China, Peoples Republic of India Kazakhstan Bangladesh Viet Nam Others 2007 20 17 12 8 5 38 India 20 China, Peoples Republic of 14 Kazakhstan 8 Pakistan 7 Philippines 7 Others 43
cance, and they continued to represent over 75% of the portfolio in 2008. In addition to due diligence and limits, ADB monitors its portfolio to identify any deterioration of credit quality and uses loan loss reserves and loan provisions to offset expected losses. During 2008, expected losses increased due to weakening credit quality.
Table 15: Nonsovereign Portfolio Expected Loss
As of 31 December 2008 and 2007
2008 $ Million Provision for loan losses Loan loss reserve requirementa Expected Loss 4.8 69.5 74.4 % 0.2 2.7 2.8 2007 $ Million 9.4 28.4 37.7 % 0.3 1.0 1.4
a The loan loss reserve requirement is subject to Board of Governors approval during the annual meeting in May 2009.
Issuer and Counterparty. Issuer risk is the risk that a bond issuer may default on its interest or principal payments; it applies to both investments which ADB internally manages and those investments for which it retains external asset managers. Counterparty risk is the risk that a counterparty may fail to meet its contractual obligations to ADB. Issuer and counterparty risks principally affect the Treasury portfolio. To control issuer and counterparty credit risk, ADB only transacts with financially sound institutions with ratings from at least two reputable public rating agencies. At the end of 2008, 92% of the Treasury portfolio was rated at least AA- with a higher proportion invested in AAA institutions than in 2007, as ADB sought to mitigate its exposure to counterparties vulnerable to the financial crisis. Moreover, the Treasury portfolio is generally invested in conservative assets, such as money market instruments and government securities. During 2008, the former decreased and the latter increased as ADB sought lower-risk instruments due to the financial crisis. In addition, ADB has established conTable 16: Issuer and Counterparty Exposure by Credit Rating
Table 14: Nonsovereign Sector Concentration

Sector Energy Finance Investment funds Transport and Communications Industry and Trade Others
2008 44 31 12 6 5 2
2007 36 36 17 5 4 1

2008 AAA, AAAAA+, AA, AAA+, A, ABelow ANote: 0 is less than 0.5%.
2007 42 52 6 0
65 27 7 1
Annual Report 2008
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Table 17: Issuer and Counterparty Exposure by Asset Class

2008 Government Securities Government Sponsored Entity Securities Deposits Corporate Securities Derivative Exposures Asset- and Mortgage-Backed Securities Cash
Table 18: Interest Rate Risk

2007 27 12 39 9 7 4 2 Duration Interest Rate VaR

VaR = value-at-risk.
2008 1.6 4.9
2007 1.5 3.5
45 25 10 9 3 4 3
servative exposure limits for its corporate investments, depository relationships, and other asset classes. ADB has not been materially impacted by the collapse in credit quality of US mortgage-backed securities. ADBs exposure to these instruments is small, and any losses have been offset by gains in ADBs higher quality investments, whose values have increased as investors have moved to safer assets. To mitigate counterparty credit risk arising through derivative transactions, ADB has strict counterparty eligibility criteria. In general, ADB will only undertake swap transactions with counterparties that have met the required minimum counterparty credit rating, executed an International Swaps and Derivatives Association Master Agreement, and signed a credit support annex. Under the credit support annex, derivative positions are marked-tomarket daily and collateral calls, mainly cash and US Treasury securities, are made in accordance with the credit support annex. ADB also sets exposure limits for individual swap counterparties and monitors these limits against both current and potential exposures.
the Treasury portfolio by employing various quantitative methods. It marks all positions to market, monitors interest rate risk metrics, and employs stress testing and scenario analysis. ADB principally uses two metrics to measure interest rate risk, duration and interest rate value-at-risk (VaR). Duration is the estimated percentage change in the portfolios value in response to a 1% parallel change in interest rates. During 2008, interest rate risk as measured by duration remained essentially constant. Although the portfolios asset composition shifted from deposits to government securities the aggregate maturity of the assets did not materially change. Interest rate VaR is a measure of possible loss at a given confidence level in a given timeframe due to changes in interest rates. ADB uses a 95% confidence level and a 1-year time horizon. In other words, ADB would expect to lose at least this amount once every 20 years due to fluctuations in interest rates. Unlike duration, which ADB uses to measure interest rate risk across the Treasury portfolio, ADB only uses VaR for the Prudential Liquidity Portfolio, which is the most exposed to interest rate risk. In 2008, interest rate risk in the Prudential Liquidity Portfolio increased primarily due to the increase in interest rate volatility. Foreign Exchange. In line with the Charter, ADB ensures that its operations assume a minimum exposure to exchange rate risk. In both the operations and Treasury portfolios, ADB is required to match its loans and investments to the same currencies in which funds are received. Borrowed funds or funds to be invested may only be converted into other currencies provided that they are fully hedged through cross currency swaps or forward exchange agreements. Given its multicurrency operations, however, ADB is exposed to fluctuations in reported US dollar results due to currency translation adjustments. Equity Price. Equity price risk arises through ADBs investments in equity securities and private equity funds. ADBs
Market Risks
Market risk is the risk of loss on financial instruments due to changes in market prices. ADB principally faces three forms of market risk: interest rate, foreign exchange, and equity price. Interest Rate. ADB is primarily exposed to interest rate risk through the Treasury portfolio. Interest rate risk in the operations portfolio is fully hedged as borrowers interest payments are matched to ADBs borrowing expenses. Therefore, the borrower assumes the risk of fluctuating interest rates whereas ADBs margin remains largely constant. ADB monitors and manages interest rate risks in
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Charter limits equity investments to 10% of unimpaired paid-in capital, reserves, and surplus less special reserves. Additionally, private equity funds are limited to 5% of this sum. ADB manages equity price risk using the same due diligence and monitoring procedures as described under nonsovereign credit risk.
Liquidity Risk
ADBs liquidity policy ensures the availability of sufficient cash flows to meet all financial and operational commitments despite uncertain borrowing conditions. Under the current framework, ADB holds sufficient liquidity to fund 18 months of operations. ADBs liquidity requirements are primarily determined by expected loan disbursements, loan amortization prepayments, debt payments, and cash from net income. In addition, ADB holds discretionary liquidity to provide flexibility in funding and debt redemptions. Liquidity levels and net cash requirements are monitored on an ongoing basis and reviewed by the Board of Directors quarterly.
due to the credit shock, and (ii) generate sufficient income to support post-shock loan growth. For the stress test, ADB generates thousands of potential portfolio scenarios and imposes credit shocks that are large enough to account for 99% of those scenarios. ADB then assesses the impact of these shocks on its capital by modeling its equity-to-loan ratio over the next 10 years. With an equity-to-loan ratio of 38% at the end of 2008, the current stress test results comfortably exceeded the desired outcome described above. Asset and Liability Management. The objectives of asset and liability management for ADB is to safeguard ADBs net worth and overall capital adequacy, promote steady growth in ADBs risk bearing capacity, and define sound financial policies to undertake acceptable levels of financial risks to provide resources for developmental lending purposes at the lowest and most stable funding cost to the borrowers along with the most reasonable lending terms, while safeguarding ADBs financial strength. The asset and liability management safeguards net worth from foreign exchange rate risks, protects net interest margin from fluctuation in interest rates, and provides sufficient liquidity to meet ADBs operations. ADB also adheres to cost pass-through pricing policy for the loans to sovereign borrowers, and allocates the most cost efficient borrowings to fund the loans. The asset and liability management objectives and practices were clarified and formalized in 2006 through the Board-approved comprehensive asset and liability management policy framework. The framework has formalized the guiding principles for managing OCR financial assets and liabilities, and provided the governing framework to guide all asset and liability management-related financial policies, including liquidity, investments, equity management, and capital adequacy.
Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. ADB is exposed to many types of operational risk, which it mitigates through sound internal controls. ADB has a rigorous process for approving transactions to minimize errors in the lending function. ADB has also adopted a strategy to strengthen business continuity, and particularly information technologies, to reduce the impact of disruptions.
Capital Adequacy
Capital is a financial institutions ultimate protection against unexpected losses that may arise from various risks. In ADBs context, it also protects shareholders from the possibility of having to contribute callable or additional paid-in capital. ADB uses stress testing to assess its capital adequacy on a regular basis. Throughout 2008, ADBs capital position remained strong. The capital stress test assesses ADBs ability to absorb credit shocks, which are the institutions principal risk, while supporting continued lending in line with its development mandate. The desired outcome of the stress test is that ADB should have sufficient capital to (i) absorb an income loss
Internal Control Over Financial Reporting

In line with global best practices on corporate governance, ADBs management carried out an evaluation of the adequacy and effectiveness of internal control over financial reporting using criteria established in Internal Control Integrated Framework issued by the Committee of the Sponsoring Organization of the Treadway Commission (COSO). The evaluation includes test of key controls over financial reporting, and ADBs external auditors concurred that ADB maintained effective internal control over financial reporting for 2008.
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Summary of Financial Performance

Net Income. Net income before net unrealized gains was $675.8 million, compared with $711.4 million in 2007. The decrease of $35.6 million (5.0%) was predominantly due to the following: PLOOLRQ GHFUHDVH LQ RYHUDOO ORDQ LQFRPH PDLQly due to $65.8 million net decrease in interest income and other loan charges, $22.0 million increase in expenses on asset swaps hedging loan products, and $2.9 million decrease in provision for loan losses. Despite a higher outstanding loan portfolio, overall loan income decreased because of lower US dollar LIBOR compared with the same period in 2007; PLOOLRQ GHFUHDVH LQ LQYHVWPHQW LQFRPH UHVXOWing from lower investment returns associated with the decrease in the interest rate environment; PLOOLRQ GHFUHDVH LQ LQFRPH IURP HTXLW\ LQYHVWments resulting mainly from $60.0 million reduction in the proportionate share of income from private equity funds, which are accounted for under equity method, $17.0 million decrease in net realized gains on disposal of equity investments, and recognition of $8.7 million impairment loss mostly associated with restructured accounts, net of $5.0 million increase in dividend income; PLOOLRQ LQFUHDVH LQ DGPLQLVWUDWLYH H[SHQVHV DOlocated to OCR. This was driven by the $15.9 million increase in overall administrative expenses ($363.7 million in 2008; $347.8 million in 2007) mainly attributed to increases in salaries ($9.5 million), business travel ($3.3 million), and contractual services ($2.2 million). This was offset by $1.5 million decrease in deferred loan origination costs related to new loans and guarantees; PLOOLRQ LQFUHDVH LQ WHFKQLFDO DVVLVWDQFH WR PHPber countries following the $10.0 million grant provided to the Java Reconstruction Fund; and PLOOLRQ GHFUHDVH LQ RYHUDOO ERUURZLQJV DQG UHlated expenses resulting mainly from declining interest rates in some markets compared with the same period in 2007.
marily the favorable result of FAS 133, 155, and 159 application totaling $451.0 million ($57.5 million in 2007), increasing the net income to $1,126.3 million for the year ended 31 December 2008 from $765.2 million for the year ended 31 December 2007. Net Unrealized Gains and Losses on Financial Instruments as per FAS 133, 155, and 159. ADB posted net unrealized gain of $1,441.7 million on derivatives used for hedging transactions compared to net unrealized loss of $351.1 million in 2007. Corresponding unrealized loss on the hedged borrowings were $1,522.9 million in 2008 compared to an unrealized gain of $408.6 million in 2007. The gain on derivatives were primarily due to significant downward shift of the short to medium-term yield curves of the major currencies, partially offset by the weakening of most major currencies (with the exception of Japanese yen) against the US dollar in 2008. The effect of declining interest rates coupled with strengthening of the US dollar during the period had a net effect of increasing the borrowing related derivatives value, i.e. swaps. The impact was largely felt on the swaps relating to non-structured debts which are designed to behave as long-term fixed assets denominated in the hedged-borrowings in original currencies. The liability portion of the swaps would behave similar to long-term US dollar LIBOR-based liabilities. Effective 1 January 2008, ADB adopted FAS 159 for non-structured swapped borrowings. The adoption of FAS 159 resulted in a favorable adjustment of $227.5 million, which was recorded as an adjustment to the beginning balance of reserves. Fair valuation of the nonstructured swapped borrowings resulted in an unrealized loss of $2,035.9 million for 2008 offsetting the gain on the hedged swap position of $2,001.4 million. However, the liquidity crisis resulting from the current global financial situation led to widening of the funding spreads resulting in a net gain of $531.7 million from the application of credit spread (FAS 157) to the entire portfolio that are carried at fair value, including structured borrowings. The appreciation of Japanese yen against the US dollar in 2008 affected the structured debt portfolio to a certain extent. The decrease in value of the underlying debts outweighed the increase in the value of the embedded derivatives, which are highly sensitive to the expected foreign exchange rates movements. On an after-swap basis, the change in fair value of the structured debts led to an unreal-
Net unrealized gains of $450.6 million for the year ended 31 December 2008 ($53.8 million in 2007) are pri-
24
ized gain of $140.0 million for the year ended 31 December 2008. The unrealized gains were due mainly to movements of foreign exchanges and interest rates. As the structured instruments are fully hedged, the swaps would economically offset any foreign exchange and interest rate risks of the instruments (Note M of OCR Financial Statements).
disclosure requirements for financial reporting purposes, while FAS 159 expands the scope of financial instruments that may be carried at fair value. These are discussed in more detail in Note B of OCRs financial statements. Provision for Loan Losses. Provision against loan losses for impaired loans reflects managements judgment and estimate of the present value of expected future cash flows discounted at the loans effective interest rate. ADB considers a loan impaired when, based on current information and events, it is probable that ADB will be unable to collect all the amounts due according to the loans contractual terms. In 2006, the Board approved the revision of the loan loss provisioning methodology for ADBs nonsovereign operations to a risk-based model. The assessment applies the concept of expected loss to establish loss provision and loss reserve, similar to the concept applied to ADBs sovereign operations approved in 2004. The provisioning estimate is performed by the Risk Management Unit on a quarterly basis. In the revised methodology, ADB uses an internal risk rating system to estimate the probability of default based on its past loan loss experience and various tools available in the market. Loans that are considered impaired based on the probability of default are provisioned through the income statement. Those that are not impaired will be provisioned through the establishment of a loss reserve in the equity section as an allocation of net income subject to the approval of the Board of Governors.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Significant accounting policies are contained in Note B of OCRs financial statements. As disclosed in the financial statements, Management estimates the fair value of financial instruments. Estimates by their nature are based on judgment and available information; therefore, actual results may differ and might have a material impact on the financial statements. Fair Value of Financial Instruments. Under statutory reporting, ADB carries its financial instruments and derivatives, as defined by FAS 133 and FAS 159, on a fair value basis. These financial instruments include embedded derivatives that are valued and accounted for in the balance sheet as a whole. Fair values are usually based on quoted market prices. If market prices are not readily available, fair values are usually determined using market-based pricing models incorporating readily observable market data and require judgment and estimates. The pricing models used for determining fair values of ADBs financial instruments are based on discounted expected cash flows using observable market data. ADB reviews the pricing models to assess the appropriateness of assumptions to reasonably reflect the valuation of the financial instruments. In addition, the fair values derived from the models are subject to ongoing internal and external verification and review. The models use marketsourced inputs such as interest rates, exchange rates, and option volatilities. Selection of these inputs may involve some judgment and may impact net income. ADB believes that the estimates of fair values are reasonable given existing controls and processes. Financial Accounting Standards Board issued FAS 157 Fair Value Measurements, in September 2006, and FAS 159Fair Value Option for Financial Assets and Financial Liabilities, in February 2007. FAS 157 emphasizes the definition and methods for measuring fair value, and expands
SPECIAL FUNDS
ADB is authorized by its Charter to establish and administer special funds. These are the Asian Development Fund, Technical Assistance Special Fund, Japan Special Fund, ADB Institute Special Fund, the Asian Tsunami Fund, the Pakistan Earthquake Fund, the Regional Cooperation and Integration Fund, and the Climate Change Fund. Financial statements for each fund are prepared in accordance with generally accepted accounting principles except for ADFs which are special purpose financial statements prepared in accordance with ADF Regulations.
Asian Development Fund

ADF is ADBs concessional financing window for developing member countries with low per capita gross na-
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25
tional product and limited debt repayment capacity. It is the only multilateral source of concessional assistance dedicated exclusively to reducing poverty and to improving the quality of life in Asia and the Pacific. Thirty-two donor members (regional and nonregional) have contributed to the fund. Cofinancing with bilateral and multilateral development partners complement ADBs ADF resources. In August 2008, the Board of Governors adopted the resolution providing for the ninth replenishment of the ADF (ADF X) and the fourth regularized replenishment of the TASF. The resolution provides for a substantial replenishment of the ADF to finance ADBs concessional program for the 4-year period from January 2009, and for a replenishment of the TASF in conjunction with the ADF replenishment, to finance technical assistance operations under the TASF. Total replenishment size is special drawing rights (SDR) 7.1 billion ($11.3 billion), consisting of SDR6.9 billion for ADF X and SDR0.2 billion for TASF. About 37% of the replenishment will be financed from new donor contributions amounting to SDR2.6 billion ($4.2 billion equivalent). The replenishment shall be effective upon receipt of the Instruments of Contribution for Unqualified Contribution commitments in an aggregate amount equivalent to at least SDR1.3 billion, and such date should not be later than 1 July 2009. Currency Management. Effective 1 January 2006, the new currency management framework for ADF, which was approved by the Board of Directors in October 2005, was implemented. Under this new framework, the practice of managing ADF resources in as many as 15 currencies was discontinued, and an approach based on special drawing rights (SDR) basket of currencies was introduced. ADF donor contributions and loan reflows received in currencies that do not constitute SDR are immediately converted into one of SDR currencies to maintain SDR-based liquidity portfolio. In addition, the borrowers obligations for new ADF loans are now determined in SDR. Loan Conversion. In July 2007, as an application of the Board-approved new currency management framework, ADB offered a full-fledged special drawing rights (SDR) approach to ADF legacy loans by providing ADF borrowers the option to convert their existing liability (i.e., disbursed and outstanding loan balance) in various currencies
into SDR, while the undisbursed portions will be treated as new loans. The conversion will shorten the time horizon to achieve the full benefits, reduce exchange rate volatility associated with legacy ADF loans, and provide a consistent debt portfolio management framework across peer multilateral banks and all ADF loans. The conversion was made available beginning 1 January 2008. A series of workshops were conducted from late 2007 to October 2008 to promote borrowers awareness of the conversion option, and assist borrowers in making informed decisions. As of December 2008, 16 out of 30 ADF borrowing countries have signified their agreement to the conversion and $11.5 billion of outstanding legacy loans had been converted to SDR loans. Revised Framework for Grants and Hard-Term Facility. In September 2007, the Board of Directors approved the revised ADF grant framework which limits grants eligibility to ADF-only countries and introduced a new hardterm ADF lending facility. The facility will have a fixed interest rate of 150 basis points below the weighted average of the 10-year fixed swap rates of the special drawing rights component currencies plus the OCR lending spread, or the current ADF rate, whichever is higher. Other terms are similar to those of regular ADF loans. In general, blend countries with per capita income not exceeding the International Development Association operational cutoff for more than 2 consecutive years and an active ordinary capital resources lending program are eligible to borrow from this new facility. The interest rate will be reset every January through a board information paper. The rate will apply to all hard-term loans approved that year and will be fixed for the life of the loan. For hard-term ADF loans approved in 2008, the interest rate was set at 3.15%. Three loans were approved under this new facility in 2008. Financial Framework. In December 2007, the Board of Directors approved a new ADF financial framework that aims to enhance the long-term financial capacity of ADF and improve prudential financial management practices. The new framework establishes tranching of liquidity to improve the liquidity management and prudential minimum liquidity level ADF should maintain. The new framework allows ADF to have a higher and more stable commitment authority for future replenishments and ensure that liquidity is managed in a transparent and efficient manner.
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Heavily Indebted Poor Countries (HIPC) Debt Relief. ADF donors requested ADBs participation in the HIPC debt relief. In line with this, ADB Board of Governors adopted Board Resolution No. 329 on 7 April 2008 for ADB to participate in the HIPC debt relief, and to provide Afghanistan with debt relief. The estimated principal amount of Afghanistans ADF debt to be forgiven and charged against ADF income is $89.8 million.6 The HIPC Initiative was launched in 1996 by the International Development Association and International Monetary Fund to reduce the excessive debt burden faced by the worlds poorest countries. A sunset clause was stipulated to prevent the HIPC debt relief from becoming a permanent facility, minimize moral hazard, and encourage early adoption of reform programs. This has been extended several times with the latest sunset clause being end-2006 with a ring-fence of its application to countries satisfying the income and indebtedness criteria using end-2004 data. Thus far, Afghanistan is the only ADF borrower that has qualified for HIPC debt relief. While other ADF borrowers have met the HIPC indebtedness criteria, it is not possible to currently estimate whether these countries will qualify for HIPC debt relief. Under the policy, upon approval of debt relief for a country by the Board of Directors, the principal component of the estimated debt relief costs will be recorded as a reduction of the disbursed and outstanding loans on a provisional basis and charged against ADF income. The International Development Association and International Monetary Fund boards will decide when a country has satisfied the conditions for reaching the completion point. Upon reaching the completion point the debt relief will become irrevocable. The accumulated provision for HIPC debt relief will be reduced when debt relief is provided on the loan service payment date. As of 31 December 2008, provision of $0.5 million has been written off under this arrangement, bringing the balance to $87.5 million, at 31 December 2008 exchange rate. Contributed Resources. During the eighth replenishment of the ADF (ADF IX), donors recommended a replenishment of $7.0 billion, consisting of $3.3 billion in new contributions from donors and $3.7 billion from internal resources based on the exchange rate specified in the Resolution of the Board
Table 19: Asian Development Fund Commitment Authoritya

31 December 2008 and 2007 ($ Million)
2008 Carryover from ADF VIII Commitment Authorityb ADF IX Contributionsc ADF VIII Contributions OCR Net Income Transfer Expanded Advance Commitment Authority Loans Savings and Cancellation Credits from Accelerated Note Encashment Program Provision for Disbursement Riskd Provision for Foreign Exchange Volatilitye Total ADF IX Commitment Authority Loans and Grants Committed ADF Commitment Authority Available for Future Commitments 124.4 2,976.5 161.6 160.0 3,895.7 1,133.3 63.0 (158.4) 15.2 8,371.3 8,248.7 122.6 2007 126.9 2,144.4 164.6 120.0 2,979.7 890.8 (157.9) 6,268.5 5,833.1 435.4
( ) = negative, ADF = Asian Development Fund, OCR = ordinary capital resources. a The schedule reflects cumulative commitment authority for ADF IX. b The US dollar equivalent of SDR80.4 million at each year-end exchange rates. c Contributions received to finance forgone interest of grants are excluded as they have been incorporated as cash inflows in the computation of Expanded Advance Commitment Authority. d Applies to contribution and net income transfer received prior to the adoption of the new ADF Financial Framework in December 2007. e Represents an allowance to cover the shortfall in the commitment authority due to exchange rate fluctuation during the last 3 months of 2008. Note: Total may not add due to rounding.
of Governors. ADF IX, which covers the 4-year period from 2005 to 2008, became effective in April 2005 after instruments of contribution deposited with ADB for unqualified contribution exceeded 50% of all pledged contributions. As of 31 December 2008, 30 donors have committed a total of $3.7 billion7 to ADF IX, including contributions of Ireland ($32.5 million) and Brunei Darussalam ($9.5 million). Total deposited installment payments amounting to $3.4 billion7 include $3.0 billion for ADF operations, $0.2 billion for Technical Assistance Special Fund, and $0.2 billion for financing forgone interest of grants. The remaining unpaid contributions under ADF VIII as of 31 December 2008 amounted to $168.8 million7 (For details of amounts released for operational commitment in 2008, see the column labeled Addition in Statistical Annex 23.) In May 2008, the Board of Governors approved the transfer of $40 million to ADF as part of OCRs net income allocation ($40 million in 2007). In addition, a total of $1,133.3 million from loan savings and cancellations have been included in the commitment authority. This resulted from Managements continuous assessment of
6 Based on the disbursed and outstanding debt as of 20 March 2006, converted to US dollar using the exchange rate as of 7 April 2008. 7 US dollar equivalent at 31 December 2008 exchange rates.
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opportunities for freeing committed resources through cancellations of unused loan balances. During 2008, promissory notes totaling $603.1 million have been encashed, $58.6 million of which was transferred to the Technical Assistance Special Fund. Loan Approvals, Disbursements, and Repayments. In 2008, 36 ADF loans totaling $1.8 billion were approved compared with 36 loans totaling $1.9 billion in 2007. Disbursements during 2008 totaled $2.0 billion, an increase of 26.3% from $1.6 billion in 2007. At the end of the year, cumulative disbursements from ADF resources were $27.0 billion. Loan repayments during the year amounted to $676.9 million. At year-end, outstanding ADF loans amounted to $26.4 billion. Status of Loans. At the end of the year, 28 sovereign loans to Myanmar with total principal outstanding of $565.8 million were in non-accrual status representing about 2.1% of the total outstanding ADF loans. Investment Portfolio Position. The ADF investment portfolio8 amounted to $6.3 billion at 31 December 2008 compared with $7.0 billion in 2007. About 16% of the portfolio was invested in bank deposits, and 84% was invested in fixed income securities. The annualized rate of return on ADF investments including unrealized gains and losses was 5.2% (4.7% in 2007). Grants. With the introduction of grant financing in ADF IX, 27 grants (24 in 2007) were approved in 2008 totaling $707.4 million ($519.3 million in 2007), while 27 grants (17 in 2007) totaling $539.8 million ($377.8 million in 2007) became effective. Cofinancing for Loans. In 2008, $87.0 million was mobilized in official loan cofinancing for two loan projects totaling $126.0 million.
Table 20: Technical Assistance Special Fund

Cumulative Resources ($ Million)
2008 Regularized Replenishment Contributions Allocations from OCR Net Income Direct Voluntary Contributions Income from Investment and Other Sources Transfers from the TASF to the ADF TOTAL 432.6 706.0 89.2 178.3 (3.5) 1,402.6 2007 425.7 683.0 88.8 167.3 (3.5) 1,361.3
( ) = negative, ADF = Asian Development Fund, OCR = ordinary capital resources, TASF = Technical Assistance Special Fund.
In August 2008, the Board of Governors adopted the resolution providing for the ninth replenishment of the ADF (ADF X) and the fourth regularized replenishment of the Technical Assistance Special Fund (TASF). Considering the demand estimate and the availability of funds from other sources, the donors agreed to contribute 3% of the total replenishment size as the fourth replenishment of the TASF. The replenishment will cover the 4-year period 2009 to 2012 (see related notes under ADF). Contributed Resources. As of 31 December 2008, 28 donors committed a total of $219.5 million to TASF, as part of the ADF IX and the third regularized replenishment of TASF. Of the total commitment, $202.9 million have been received. During the year, India made a direct voluntary contribution amounting to $0.25 million, and Pakistan, $0.07 million. In addition, $23.0 million was allocated to TASF as part of OCRs 2007 net income allocation, and a total of $7.0 million regularized replenishment was received. At the end of 2008, total TASF resources amounted to $1,402.6 million, of which $1,299.9 million was committed, leaving an uncommitted balance of $102.7 million (Statistical Annex 24). Operations. Technical assistance (TA) commitments (approved and effective) increased from $77.5 million in 2007 to $108.2 million in 2008 for 156 TA projects that were made effective during the year, net of $15.6 million ($11.9 million in 2007) write back of undisbursed commitments for completed and cancelled TA projects. Undisbursed commitments for technical assistance increased to $222.7 million as of 31 December 2008 ($183.7
Technical Assistance Special Fund

The Technical Assistance Special Fund was established to provide technical assistance on a grant basis to developing member countries of the Asian Development Bank and regional technical assistance.
8 Includes securities purchased under resale arrangement.
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million as of 31 December 2007). TASF financed 43.5% of all TA activities approved in 2008.
Table 21: Japan Special Fund

Technical Assistance by Sector, 2008
$ Milliona Agriculture and Natural Resources Transport and Communications Multisector Education Law, Economic Management and Public Policy Energy Industry and Trade Finance Water Supply, Sanitation and Waste Management Health, Nutrition, and Social Protection TOTAL
a Totals may not add due to rounding.
% 25 18 17 8 8 8 7 5 3 1 100
Investment Position. As of 31 December 2008, total TASF investment portfolio, including securities purchased under resale arrangement, amounted to $295.7 million, slightly higher than the $295.1 million as of year-end of 2007. Despite a higher investment portfolio in 2008, total revenue from investments decreased to $10.9 million, from $14.2 million during the same period in 2007, due mainly to the decrease in yield on US dollar placements.
13.5 10.1 9.1 4.5 4.4 4.4 3.8 2.9 1.9 0.4 55.0
Japan Special Fund

The Japan Special Fund was established in 1988 when ADB acting as the administrator, entered into a financial arrangement with Japan, who agreed to make the initial contribution, to help developing member countries of ADB restructure their economies and broaden the scope of opportunities for new investments, mainly through technical assistance operations. Contributed Resources. In January 2008, Japan contributed 1.9 billion ($17.4 million equivalent) as a regular contribution to Japan Special Fund. As of 31 December 2008, Japans cumulative contribution to the fund since its inception in 1988 amounted to 112.9 billion (about $973.7 million equivalent) comprising regular contributions of 94.8 billion ($822.9 million equivalent) and supplementary contributions of 18.1 billion ($150.8 million equivalent). The uncommitted balance including approved technical assistance but not yet effective as of 31 December 2008 was $86.8 million. Operations. The technical assistance (TA) grants financed by Japan Special Fund continued to support ADB operations aimed at reducing poverty. In 2008, 57 TA projects totaling $55.0 million were approved, and 69 TA projects totaling $59.6 million became effective. The undisbursed TA commitments increased to $95.8 million as of 31 December 2008 ($82.9 million as of 31 December 2007). Sector Activities. In 2008, the Japan Special Fund (JSF) financed 20% of the total amount of technical assistance (TA) that ADB approved, including 47% of the total amount of project preparatory TA during the year.
Table 21 illustrates the breakdown of JSF approvals by sector. Investment position. As of 31 December 2008, total Japan Special Fund investment portfolio amounted to $198.9 million, lower than the balance of $215.1 million as of 31 December 2007. With this, and with lower yield on US dollar placements, revenue from investments decreased, from $11.8 million in 2007 to $6.5 million in 2008.
ADB Institute Special Fund

The ADB Institute was established in 1996 as a subsidiary body of ADB, whose objectives are the identification of effective development strategies and capacity improvements for sound development management in developing member countries. The costs for operating the ADB Institute are met from the ADB Institute Special Fund which is administered by ADB in accordance with the Statute of ADB Institute. In 2008, Japan committed its 13th contribution in the amount of 0.70 billion ($7.8 million equivalent), which was reported as Due from Contributors. As of 31 December 2008, cumulative contributions committed amounted to 16.5 billion (about $141.2 million equivalent) excluding translation adjustments. Of the total contributions received, $125.5 million had been used by the end of the year mainly for research and capacity-building activities including organizing symposia, forums, and trainings; preparing research reports, publications, and websites; and for associated administrative expenses. The balance of net current assets (excluding property, furniture, and equipment) available for future projects and programs was about $15.6 million.
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Asian Tsunami Fund

The Asian Tsunami Fund was established on 11 February 2005 in response to the special circumstances surrounding the developing member countries that were stricken by the effects of the tsunami on 26 December 2004. Contributed Resources. ADB contributed $600 million to the fund, of which, $50 million unutilized funds were transferred back to OCR ($40 million in November 2005 and $10 million in June 2006). In addition, Australia contributed $3.8 million, and Luxembourg, $1.0 million. As of 31 December 2008, total resources of the fund amounted to $625.9 million, $579.5 million of which has been utilized, leaving an uncommitted balance of $46.4 million ($40.0 million as of 31 December 2007). Operations. There were no technical assistance or grants that were approved or made effective during the year. The balance of undisbursed commitments as of 31 December 2008 amounted to $248.3 million, compared with $389.1 million as of year-end of 2007. Investment position. As of 31 December 2008, Asian Tsunami Funds investment portfolio amounted to $251.3 million ($366.5 million as of 31 December 2007). With the lower portfolio, and lower yield on US dollar placements, revenue from investments decreased, from $22.3 million in 2007 to $9.1 million in 2008.
sources of the fund amounted to $142.4 million, $140.2 million of which has been utilized, leaving an uncommitted balance of $2.2 million (negative $3.5 million as of 31 December 2007). The contributions of Belgium and Norway were in the form of debt-for-development swap agreements. The agreements involved the conversion of Pakistans loan service payments to the two countries for their loans to Pakistan of up to 9.9 million and $20.0 million, respectively, into Belgiums and Norways contributions to the Pakistan Earthquake Fund. Belgiums contributions were made in three equal installments of 3.3 million from 2007 to 2008, while Norways contributions were undertaken in four equal installments of $5.0 million in 20062008. Operations. There were no technical assistance or grants that were approved or made effective during the year. The balance of undisbursed commitments as of 31 December 2008 amounted to $66.2 million, compared with $73.2 million as of year-end of 2007. Investment position. As of 31 December 2008, Pakistan Earthquake Funds investment portfolio amounted to $61.3 million ($60.7 million as of 31 December 2007). With the increase in the average investment portfolio, revenue from investments for 2008 increased to $3.1 million from $2.4 million in 2007.
Regional Cooperation and Integration Fund

The Regional Cooperation and Integration Fund was established in February 2007 in response to the increasing demand for regional cooperation and integration activities among ADBs member countries in Asia and the Pacific. Its main objective is to improve regional cooperation and integration (RCI) in Asia and the Pacific by facilitating the pooling and provision of additional financial and knowledge resources to support RCI activities. Contributed Resources. ADB contributed $40 million to the fund as part of the 2006 OCR net income allocation. As of 31 December 2008, total resources of the fund amounted to $42.5 million, $17.9 million of which has been utilized, leaving an uncommitted balance of $24.6 million ($33.8 million as of 31 December 2007).
Pakistan Earthquake Fund

The Pakistan Earthquake Fund was established in November 2005 in response to the special needs of Pakistan subsequent to the earthquake on 8 October 2005. The dedicated fund is to deliver emergency grant financing for investment projects and technical assistance to support immediate reconstruction, rehabilitation and associated development activities. Contributed Resources. ADB contributed $80 million to the fund. In addition, Australia contributed $15.0 million; Belgium, $14.3 million; Finland, $12.3 million; and Norway, $20.0 million. As of 31 December 2008, total re-
30
Operations. In 2008, 13 technical assistance totaling $10.5 million became effective (four technical assistance and one supplementary approval totaling $7.4 million in 2007). The balance of undisbursed commitments as of 31 December 2008 amounted to $16.6 million, compared with $7.4 million as of year-end of 2007. Investment position. As of 31 December 2008, Regional Cooperation and Integration Funds investment portfolio amounted to $39.3 million ($39.9 million as of 31 December 2007). With the increase in average volume of investments, which was offset by lower yield on US dollar placements, revenue from investments for 2008 was just slightly higher than the revenue for 2007 ($1.24 million in 2008; $1.19 million in 2007).
Climate Change Fund

The Climate Change Fund was established in April 2008 to facilitate greater investments in DMCs to address the causes and consequences of climate change alongside ADBs own assistance in various related sectors. Contributed Resources. ADB provided the initial contribution of $40.0 million in May 2008, as part of OCRs 2007 net income allocation. With accumulated investment income of $0.5 million, total resources of the fund as of 31 December 2008 amounted to $40.5 million, $3.1 million of which has been utilized, leaving an uncommitted balance of $37.4 million. Operations. In 2008, one technical assistance amounting to $3.0 million was approved and became effective. There has been no disbursement yet for this technical assistance. Investment position. As of 31 December 2008, Climate Change Funds investment portfolio amounted to $38.9 million, providing $0.5 million revenue for the period.
projects. They play an important role in complementing ADBs own resources to meet capacity development and other specific demands from DMCs. Multilateral, bilateral, and private sector partners have contributed more than $2.0 billion in grants to ADB operations (Table 22). In 2008, a total of $154.2 million in grant cofinancing was mobilized comprising $84.2 million for 76 technical assistance projects and $70.0 million for 17 investment projects. By yearend, there were 29 trust funds under active administration by ADB which included 19 active single donor trust funds to finance activities in various sectors or for specific themes, and 10 multidonor trust funds to finance activities with a thematic focus, including poverty reduction, governance, gender and development, managing for development results, HIV/AIDS, water, energy, education, information and communications technology, and trade and finance. Initially, trust funds were established through donorspecific channel financing agreements, for a wide range of sectors, focused primarily on financing technical assistance operations. More recently, in response to the changing needs of developing member countries and consistent with ADBs financing partnership strategy9 and harmonization efforts, ADB has established some trust funds based on common agreements with development partners and financing through instruments of contribution. These are established under an umbrella facility of sector- and themefocused financing partnership, and finance technical assistance and grant components of investment projects. Technical Assistance and Grant Funds under Financing Partnership Facilities and Special Initiatives. ADB has established two multidonor and three single donor trust funds under the financing partnership facilities framework, to support both technical assistance and grant components of investment projects in priority sectors consistent with Strategy 2020. Since 2006, about $100.0 million has been mobilized from bilateral sources to finance activities in the water sector, for clean energy, and for regional cooperation and integration. Japan made its initial contributions of $23.1 million to the Asian Clean Energy Fund and $11.5 million to the Investment Climate Facilitation Fund, the two new initiatives that were established last year under the Clean Energy Financing Partnership Facility and Regional Co-
GRANT COFINANCING
Trust funds and project-specific grants are key instruments to mobilize and channel grants from external sources to finance technical assistance and components of investment
9 ADB. 2006. ADBs Financing Partnership Strategy. Manila.
Annual Report 2008
31
operation and Integration Facility. Austria and Spain each contributed $5 million to the Multidonor Water Trust Fund. Spain and Sweden made their first contributions of $5 million and $4.7 million respectively, to the Multidonor Clean Energy Fund. Australia expressed its intent to make a total additional contribution of A$25 million each to these multidonor funds by 2011. Under ADBs Carbon Market Initiative, the Future Carbon Fund was established in 2008 complementing the existing Asia Pacific Carbon Fund. The fund will provide financing up front for ADB-supported projects that will continue to generate carbon credits after 2012. The initial target size of the fund is $100 million and may be increased to $200 million if there is sufficient demand.
ued at $34.0 million were approved in 2008 (www.adb.org/ JFPR; Statistical Annex 27). A number of projects have been completed this year and these are the subjects of knowledgesharing sessions organized by ADB. In 2008, the JFPR publication series was launched which will focus on the impact and outcomes, and lessons learned from JFPR projects.
Japan Scholarship Program

The Japan Scholarship Program (JSP) was established in 1988 to provide an opportunity for well-qualified citizens of developing member countries to undertake postgraduate studies in economics, management, science and technology, and other development-related fields at selected educational institutions in Asia and the Pacific. JSP is funded by Japan and administered by ADB. Currently, 20 institutions in 10 countries participate. Between 1988 and 2008, Japan contributed $100.1 million. A total of 2,417 scholarships has been awarded to recipients from 35 member countries. Recently, an average of about 150 scholarships have been awarded each year. Of the total, 2,053 have completed their courses. Women have received 823 scholarships.
Japan Fund for Poverty Reduction

The Japan Fund for Poverty Reduction (JFPR) was established in May 2000 as a trust fund to support poverty reduction and social development activities that can add substantial value to ADB projects. Since 2000, Japan has contributed $360.4 million in total. To date, $300.3 million for 116 projects has been approved, of which 13 projects val-
32
Table 22: Schedule of Contributions and Net Assets Grants from External Sources
As of 31 December 2008 ($ Million)

Contribution Administered by ADB Country Australia Austria Belgium Brunei Darussalam Canada China, Peoples Republic of Denmark European Community Finland France Ireland Italy Japanb Korea, Republic of Luxembourg The Netherlands New Zealand Norway Portugal Spain Sweden Switzerland United Kingdom and Northern Ireland United States Subtotal Others Cities Alliance Global Environment Fund Nordic Development Fund Private Sector/Foundations Public Private Infrastructure Advisory Facility Trust Fund for Forest (Viet Nam) United Nation Development Programme Subtotal Not Administered by ADB Country Switzerland Kuwait Subtotal Grand Total 25.7 15.0 40.7 2,794.1 6.6 1.0 7.6 960.7 0.5 76.0 11.0 3.0 0.4 17.2 111.2 219.3 (0.0) 28.3 (0.4) 0.1 (0.0) 1.5 0.3 29.8 161.3 6.0 29.2 0.6 124.1 20.2 24.7 250.0 56.8 33.4 2.2 2.7 526.8 20.1 18.2 370.1 31.6 117.5 15.0 47.6 142.2 40.0 491.9 1.8 2,534.0 13.6 3.3 27.1 (0.0) 51.6 8.3 2.9 93.9 31.5 4.1 0.5 0.9 214.2 13.9 15.5 126.8 0.6 43.6 15.1 37.8 49.9 28.0 139.8 0.4 923.3 Net Assetsa
Note: Figures may not add to total due to rounding. ( ) Negative; 0.0 is less than $50,000. a Excludes projects approved but not yet effective. b Includes Japan Fund for Poverty Reduction, Japan Scholarship Program, Japan Fund for Information, Communication and Technology, and Japan Fund for Public Policy Training.
Annual Report 2008
33

Management's Report on Internal Control over Financial Reporting
The management of Asian Development Bank (ADB) is responsible for establishing and maintaining adequate internal control over financial reporting. ADB's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. ADB's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of ADB; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of ADB are being made only in accordance with authorizations of management and directors of ADB; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of ADB's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ADB's management assessed the effectiveness of ADB's internal control over financial reporting as of 31 December 2008. In making this assessment, ADB's management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control Integrated Framework. Based on that assessment, management believes that as of 31 December 2008, ADB's internal control over financial reporting is effective based upon the criteria established in Internal Control Integrated Framework.
Haruhiko Kuroda President
Bindu N. Lohani Vice President (Finance and Administration)
Hong-Sang Jung Controller
5 March 2009
34
PricewaterhouseCoopers LLP pwc.com/sg 8 Cross Street #17-00 PWC Building Singapore 048424 Telephone (65) 6236 3388 Facsimile (65) 6236 3300 GST No.: M90362193L Reg. No.: T09LL0001D
Report of Independent Auditors to the Asian Development Bank
In our opinion, the accompanying balance sheets and the related statements of income and expenses, cash flows, and changes in capital and reserves present fairly, in all material respects, the financial position of the Asian Development Bank (ADB or the Bank)Ordinary Capital Resources at 31 December 2008 and 2007, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, managements assertion that ADB maintained effective internal control over financial reporting as of 31 December 2008 is fairly stated, in all material respects, based on criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The management of ADB is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assertion of the effectiveness of internal control over financial reporting, included in the accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on ADBs internal control over financial reporting based on our integrated audit in 2008 and financial statement audit in 2007. We conducted our audits of the financial statements in accordance with auditing standards generally accepted in the United States of America and our audit of internal control over financial reporting in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
PricewaterhouseCoopers LLP (Registration No. T09LL0001D) is an accounting limited liability partnership registered in Singapore under the Limited Liability Partnerships Act (Chapter 163A). It was converted from a partnership (with the name PricewaterhouseCoopers and Registration no. 000640) to an accounting limited liability partnership on 1 January 2009. PricewaterhouseCoopers LLP is part of the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
Annual Report 2008
35
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying summary statements of loans and of borrowings as at 31 December 2008 and 2007, and of statement of subscriptions to capital stock and voting power as at 31 December 2008 are presented for purposes of additional analyses and are not required parts of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. A companys internal control over financial reporting is a process effected by those charged with governance, management, and other personnel, designed to provide reasonable assurance regarding the preparation of reliable financial statements in accordance with accounting principles generally accepted in the United States of America. A companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and those charged with governance; and (iii) provide reasonable assurance regarding prevention, or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
PricewaterhouseCoopers LLP Public Accountants and Certified Public Accountants Singapore 5 March 2009
36
ASIAN DEVELOPMENT BANKORDINARY CAPITAL RESOURCES

BALANCE SHEET 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
ASSETS 2008 DUE FROM BANKS (Notes B and C) INVESTMENTS (Notes B, C, D, L, and P) Government and government-guaranteed obligations Time deposits Other securities SECURITIES TRANSFERRED UNDER REPURCHASE AGREEMENT (Notes B and P) SECURITIES PURCHASED UNDER RESALE ARRANGEMENT (Notes B and P) LOANS OUTSTANDING (OCR-5) (Notes A, B, E, and Q) (Including FAS 133 adjustment of $451 2008 and $538 2007; net unamortized loan origination costs of $68,262 2008 and $42,130 2007) Sovereign Nonsovereign $ 142,238 2007 $ 108,821
$ 6,485,000 1,481,370 7,446,149
15,412,519
$ 2,343,130 7,491,886 3,461,927
13,296,943
309,358
5,041,387
511,756
427,132
34,256,740 1,662,494 35,919,234
29,008,793 1,289,129 30,297,922 35,910,060 641,427 15,043 30,282,879 808,157
Lessprovision for loan losses EQUITY INVESTMENTS (Notes A, B, G, and P) ACCRUED REVENUE On investments On loans RECEIVABLE FROM MEMBERS (Note K) Nonnegotiable, noninterest-bearing demand obligations (Note C) RECEIVABLE FROM SWAPS (Notes B, H, P, and Q) Borrowings Others OTHER ASSETS Property, furniture, and equipment (Notes B and I) Investment related receivables Unamortized issuance cost of borrowings Miscellaneous (Note N)
9,174
131,880 299,184
431,064
143,785 320,514
464,299
144,514
174,805
23,831,087 882,793
24,713,880
17,968,867 512,089
18,480,956
158,235 229,390 2,781 114,530
504,936
154,239 138,149 58,869 112,536
463,793
TOTAL
The accompanying notes are an integral part of these financial statements (OCR-8).
$78,721,752
$69,549,172
Annual Report 2008
37
OCR-1
LIABILITIES, CAPITAL, AND RESERVES 2008 BORROWINGS (OCR-6) (Notes B, H, J, and P) At amortized cost At fair value ACCRUED INTEREST ON BORROWINGS PAYABLE FOR SWAPS (Notes B, H, J, P, and Q) Borrowings Others PAYABLE UNDER SECURITIES REPURCHASE AGREEMENT (Note B) ACCOUNTS PAYABLE AND OTHER LIABILITIES Investment related payables Undisbursed technical assistance commitments (Note M) Accrued pension and postretirement medical benefit costs (Note O) Miscellaneous (Notes B, F, I, and N) TOTAL LIABILITIES CAPITAL AND RESERVES (OCR-4) Capital stock (OCR-7) (Notes B and K) Authorized and subscribed (SDR35,463,110,000 2008 and 2007) Lesscallable shares subscribed Paid-in shares subscribed Lesssubscription installments not due Subscription installments matured Lesscapital transferred to the Asian Development Fund 2007
$ 4,627,521 31,012,976
$35,640,497 385,949
$28,615,661 2,954,704
$31,570,365 388,935
$24,867,815 1,198,781
26,066,596
$16,936,964 583,320
17,520,284
301,759
5,092,316
275,066 10,489 635,300 136,626
230,114 2,318 368,284 121,686
1,057,481 63,452,282
722,402 55,294,302
54,890,156 51,029,546 3,860,610 9,848 3,850,762 73,691 3,777,071
55,977,810 52,040,702 3,937,108 19,664 3,917,444 75,151 3,842,293
Net notional amounts required to maintain value of currency holdings (Notes B and K) Ordinary reserve (Note L) Special reserve (Note L) Loan loss reserve (Note L) Surplus (Note L) Cumulative revaluation adjustments account (Note L) Cumulative effect of FAS 157/159 adoption (Note B) Net income after appropriation (OCR-2) (Note L) Accumulated other comprehensive income (OCR-4) (Notes B and L) TOTAL
(564,383) 9,532,487 209,723 195,062 894,594 (23,336) 227,500 1,119,473 (98,721) 15,269,470 $78,721,752
(661,197) 9,245,332 202,847 182,100 616,300 (110,959) 760,174 177,980 14,254,870 $69,549,172
38
OCR-2
ASIAN DEVELOPMENT BANKORDINARY CAPITAL RESOURCES ORDINARY CAPITAL RESOURCES

STATEMENT OF INCOME AND EXPENSES For the Years Ended 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
2008 REVENUE (Note M) From loans (Notes B and E) Interest Commitment charge Other From investments (Notes B and D) Interest From guarantees (Notes B and F) From equity investments From other sourcesnet (Notes E and R) TOTAL REVENUE EXPENSES (Note M) Borrowings and related expenses (Note J) Administrative expenses (Note M) Technical assistance to member countries Provision for losses (Notes B and E) Other expenses TOTAL EXPENSES NET REALIZED GAINS (LOSSES) From loans From investments (Notes D and M) From equity investments (Note M) From borrowings Others NET REALIZED (LOSSES) GAINS NET UNREALIZED GAINS (Note M) NET INCOME
2007
$1,316,105 59,668 (17,792) $1,357,981
$1,385,036 55,206 2,096
$1,442,338
677,175 6,876 3,737 18,685 $2,064,454
683,212 5,049 58,897 18,835 $2,208,331
1,208,391 141,047 8,357 (3,467) 6,272 1,360,600
1,389,778 127,327 (683) (579) 3,998 1,519,841
525 (24,837) (3,884) 70 30 (28,096) 450,591 $1,126,349
3,980 (2,801) 21,793 (106) 39 22,905 53,828 $ 765,223
Annual Report 2008
39
OCR-3
ASIAN DEVELOPMENT BANKORDINARY CAPITAL RESOURCES

STATEMENT OF CASH FLOWS For the Years Ended 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
2008
CASH FLOWS FROM OPERATING ACTIVITIES Interest and other charges on loans received Interest on investments received Interest received for securities purchased under resale arrangement Interest and other financial expenses paid Administrative expenses paid Technical assistance disbursed Othersnet Net Cash Provided by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Sales of investments Maturities of investments Purchases of investments Net receipts (payments) on future contracts Net (payments for) receipts from securities purchased under resale arrangement Principal collected on loans Loans disbursed Net currency and interest rate swaps Property, furniture, and equipment acquired Purchases of equity investments Sales of equity investments Net Cash Used in Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds of new borrowings Borrowings redeemed Matured capital subscriptions collected1 Borrowing issuance expenses paid Demand obligations of members encashed Net currency and interest rate swaps Resources transferred to ADF Resources transferred to TASF Resources transferred to CCF Resources transferred to RCIF Net Cash Provided by Financing Activities Effect of Exchange Rate Changes on Due from Banks Net Increase (Decrease) in Due from Banks Due from Banks at Beginning of Year Due from Banks at End of Year RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Net Income (OCR-2) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Provision for losses written backnet Net realized losses (gains) from investments and other borrowings Proportionate share in losses (earnings) on equity investments Net unrealized gains Change in accrued revenue from loans, investments, and other swaps Change in receivable from ADF - allocation of administrative expenses Change in accrued interest on borrowings and swaps, and other expenses Change in undisbursed technical assistance commitments Change in pension and postretirement benefit liability Othersnet Net Cash Provided by Operating Activities
1
2007
$ 1,202,933 635,459 17,080 (1,236,490) (95,784) (1,477) 13,452 535,173 8,205,482 176,587,583 (184,797,477) (372) 1,990 1,454,419 (5,074,927) (8,329) (9,569) (115,603) 112,107 (3,644,696) 11,874,946 (9,137,838) 4,618 (30,506) 8,068 368,067 (40,000) (40,000) 3,007,355 5,571 (96,597) 205,418 $ $ 108,821 765,223 81,127 (579) (18,886) (47,827) (53,828) (252,022) (2,902) 144,002 (2,409) (60,171) (16,555) $ 535,173
1,230,411 633,155 5,634 (913,351) (118,517) (136) 49,153 886,349 7,979,848 152,126,260 (162,198,163) 1,082 (61,122) 1,919,052 (6,340,161) 2,097 (20,302) (125,697) 53,550 (6,663,556) 11,803,386 (6,301,308) 4,618 (13,030) 9,255 408,500 (40,000) (23,000) (40,000) 5,808,421 2,203 33,417 108,821
$ $
142,238 1,126,349 301,985 (3,467) 19,963 12,160 (450,591) (116,103) (2,973) 224,249 8,171 (259,835) 26,441
886,349
Supplementary disclosure of noncash financing activities: Nonnegotiable, noninterest-bearing demand promissory notes amounting to $2,726 ($2,738 - 2007) were received from members.
40

STATEMENT OF CHANGES IN CAPITAL AND RESERVES For the Years Ended 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Notes B and K)
Net Notional Maintenance of Value Cumulative Accumulated Revaluation Net Income Other Adjustments After Comprehensive Account Appropriations Income
Capital Stock Balance1 January 2007
Ordinary Reserve
Special Reserve
Loan Loss Reserve
Surplus
Total
$3,652,800
$(672,899)
$8,993,737
$197,799
$130,100
$330,117
27,519
$565,886
$ (82,160) $13,142,899
Comprehensive income for the year 2007 (Note L) Appropriation of guarantee fees to Special Reserve (Note L) Change in SDR value of paid-in shares subscribed 185,667 Change in subscription installments not due (2,889) Additional paid-in shares subscribed during the year 10,242 Change in SDR value of capital transferred to Asian Development Fund (3,527) Change in notional maintenance of value (Note K) Allocation of 2006 net income to ordinary reserve, loan loss reserve and surplus and transfer from cumulative revaluation account (Note L) Allocation of 2006 net income to ADF and RCIF (Note L) Charge to ordinary reserve for change in SDR value of capital stock (Note L) Balance31 December 2007
765,223
260,140
1,025,363
5,049
(5,049)
185,667 (2,889) 10,242
(3,527)
11,702
11,702
286,183
52,000
286,183
(138,479)
(485,886) (80,000)
(80,000)
(34,587)
(34,587)
$3,842,293
$(661,197)
$9,245,332
$202,847
$182,100
$616,300
$(110,959)
$760,174
$177,980
$14,254,870
Annual Report 2008
41
OCR-4
Capital Stock Balance31 December 2007
Net Notional Maintenance of Value
Ordinary Reserve
Special Reserve
Loan Loss Reserve
Surplus
Cumulative Accumulated Revaluation Net Income Other Adjustments After Comprehensive Account Appropriations Income
Total
$ 3,842,293
$ (661,197)
$ 9,245,332
$ 202,847
$ 182,100
$ 616,300
$(110,959) $
760,174
$177,980 $ 14,254,870
Cumulative effect of FAS 157/159 adoption Comprehensive income for the year 2008 (Note L) Appropriation of guarantee fees to Special Reserve (Note L) Change in SDR value of paid-in shares subscribed (74,035) Change in subscription installments not due 7,353 Change in SDR value of capital transferred to Asian Development Fund 1,460 Change in notional maintenance of value (Note K) Allocation of 2007 net income to ordinary reserve, loan loss reserve and surplus and transfer to cumulative revaluation account (Note L) Allocation of 2007 net income to ADF, TASF and CCF (Note L) Charge to ordinary reserve for change in SDR value of capital stock (Note L) Balance31 December 2008
227,500 1,126,349 (276,701)
227,500 849,648
6,876
(6,876)
(74,035) 7,353
1,460
96,814
96,814
278,294
12,962
278,294
87,623
(657,174) (103,000)
(103,000)
8,860
8,860
$3,777,071
$(564,383) $9,532,487
$209,723
$195,062
$894,594
$(23,336) $1,346,973
$(98,721) $15,269,470
Note: Figures may not add to total due to rounding.
Accumulated Other Comprehensive Income (Note L) For the Years Ended 31 December 2008 and 2007 Expressed in Thousands of United States Dollar (Note B)
FAS 133 Adjustments and Amortization 2008 Balance, 1 January Amortization Other comprehensive income for the year Balance, 31 December $ (289) (669) $ (958) $ 2007 $ (1,154) 865 (289) Accumulated Translation Adjustments 2008 $(113,385) (43,420) $(156,805) 2007 $(200,039) 86,654 $(113,385) Unrealized Investment Holding Gains 2008 $433,376 27,223 $460,599 2007 $200,584 232,792 $433,376 Pension/ Postretirement Liability AdjustmentFAS 158 2008 $(141,722) (259,835) $(401,557) 2007 $(81,551) (60,171) $(141,722) Accumulated Other Comprehensive Income 2008 $177,980 (669) (276,032) $(98,721) 2007 $(82,160) 865 259,275 $177,980
42

SUMMARY STATEMENT OF LOANS 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
Loans Outstanding1 $ 72,745 55,328 517,884 7,000 8,464,133 94,832 25,000 6,453,809 10,160,917 216,529 108,847 62,743 212,368 1,500 3,142 101 12,500 1,214 16,929 4,345,421 123,821 3,891,694 319,722 51,145 440,428 173,220 35,832,972 18,000 35,850,972 (9,174) 68,262 $35,910,060 $34,252,384 1,573,676 84,000 $35,910,060 $30,255,792 (15,043) 42,130 $30,282,879 $29,003,104 1,248,775 31,000 $30,282,879 Undisbursed Balances of Effective Loans2 $ 31,667 235,552 822,182 4,223,072 24,565 4,289,109 545,360 25,128 7,257 10,500 4,699 2,000 2,003,171 113,878 171,821 566,342 301,006 425,787 13,803,096 14,500 13,817,596 $13,817,596 $13,099,342 718,254 $13,817,596 $12,971,665 $12,971,665 $12,814,137 113,528 44,000 $12,971,665 $ Loans Not Yet Effective 215,400 82,000 51,000 1,658,852 8,630 1,563,480 95,000 390,000 599,300 490,000 7,500 85,000 1,552,200 6,798,362 32,500 6,830,862 $6,830,862 $5,498,830 1,032,032 300,000 $6,830,862 $6,039,610 $6,039,610 $5,061,815 797,795 180,000 $6,039,610 $ Total Loans 104,412 506,280 1,422,066 51,000 7,000 14,346,057 8,630 119,397 25,000 12,306,398 10,801,277 631,657 108,847 70,000 212,368 12,000 3,142 4,800 14,500 1,214 16,929 6,947,892 237,699 4,553,515 893,564 51,145 826,434 2,151,207 56,434,430 65,000 56,499,430 (9,174) 68,262 $56,558,518 $52,850,556 3,323,962 384,000 $56,558,518 $49,267,067 (15,043) 42,130 $49,294,154 $46,879,056 2,160,098 255,000 $49,294,154 Percent of Total Loans 0.18 0.90 2.52 0.09 0.01 25.38 0.02 0.21 0.04 21.77 19.11 1.12 0.19 0.12 0.38 0.02 0.01 0.01 0.03 0.00 0.03 12.29 0.42 8.06 1.58 0.09 1.46 3.84 99.88 0.12 100.00
Borrowers/Guarantors Afghanistan Azerbaijan Bangladesh Bhutan Cambodia China, Peoples Rep. of Cook Islands Fiji Islands Georgia India Indonesia Kazakhstan Korea, Rep. of Lao Peoples Dem. Rep. Malaysia Maldives Marshall Islands Micronesia, Fed. States of Mongolia Myanmar Nauru Nepal Pakistan Papua New Guinea Philippines Sri Lanka Thailand Uzbekistan Viet Nam Regional TOTAL 31 December 2008 Provision for loan losses Unamortized loan origination cost net NET BALANCE 31 December 2008 Made up of: Sovereign Loans Nonsovereign Loans Private Sector Public Sector Net balance 31 December 2008 TOTAL 31 December 2007 Provision for loan losses Unamortized front-end fee NET BALANCE 31 December 2007 Made up of: Sovereign Loans Nonsovereign Loans Private Sector Public Sector Net balance 31 December 2007
1
Amounts outstanding on the multicurrency fixed lending rate loans totaled $33,734 ($38,049 - 2007), on pool-based loans totaled $10,257,327 ($10,861,527 - 2007) and on LIBOR-based loans and market-based loans totaled $25,559,911 ($19,356,215 - 2007). The average yield on loans was 3.84% (5% - 2007). Of the undisbursed balances, ADB has made irrevocable commitments to disburse various amounts totaling $333,541 ($361,280 - 2007).
Annual Report 2008
43
OCR-5
MATURITY OF EFFECTIVE LOANS
Twelve Months Ending 31 December 2009 2010 2011 2012 2013
Amount $ 1,987,970 2,370,739 2,641,966 2,935,736 3,152,033
Five Years Ending 31 December 2018 2023 2028 2033 over 2033 Total
Amount 14,245,184 11,685,193 7,521,777 3,086,366 41,604 $49,668,568 3
SUMMARY OF CURRENCIES RECEIVABLE ON LOANS OUTSTANDING
Currency Chinese yuan Euro Japanese yen Indian rupee Indonesian rupiah $
2008 83,098 5,566,126 190,354 10,762 $
2007 23,001 920 4,607,011 143,024
Currency Kazakhstan tenge Pakistan rupee Philippine peso Swiss franc United States dollar Total
2008 39,727 131 81,011 3,247 29,876,516 $35,850,972
2007 49,776 42,856 3,502 25,385,702 $30,255,792
Includes undisbursed commitment relating to Revolving Credit Facility of Trade Financing Facilitation Program amounting to $14,500.
44

SUMMARY STATEMENT OF BORROWINGS 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
Borrowings Principal Outstanding 2008
Australian dollar Canadian dollar Chinese yuan Euro Hong Kong dollar Indian rupee Japanese yen Kazakhstan tenge Malaysian ringgit Mexican peso New Taiwan dollar New Zealand dollar Philippine peso Pound sterling Singapore dollar South African rand Swiss franc Thai baht Turkish lira United States dollar Subtotal Unamortized discounts/ premiums and transition adjustments ATA FAS 133 Adjustments Total $ 6,010,372 1,327,790 145,574 42,851 365,694 100,867 3,639,786 39,727 472,027 121,615 153,801 402,099 150,736 882,641 400,826 2,469,917 414,266 327,484 1,416,566 16,787,230 35,671,869 (31,372)
1
Swap Arrangements2 Payable (Receivable)3 2008

$ (6,094,769) (1,496,399) 28,805 (31,718) (45,899) (367,466) 26,779 (27,398) 4,472,977 (3,285,653) (447,571) (123,482) (154,063) (413,403) 3,584 (121,092) (767,883) (404,681) (2,483,788) (329,481) (1,334,657) 20,335,670 (5,901,684) $ 1,036,728
2007
$ 5,729,446 1,526,591 136,909 47,117 345,983 126,791 4,607,002 49,776 421,941 155,913 146,437 463,271 168,824 695,816 380,307 1,850,334 374,924 349,708 474,746 13,517,474 31,569,310 1,055
2007
$(5,463,460) (1,521,721) 14,363 (45,819) (353,274) 16,384 2,706,761 (3,220,956) (421,221) (153,378) (146,437) (464,535) (130,271) (517,914) (392,574) (1,742,132) (356,683) (483,611) 14,199,456 (2,554,881) $(1,031,903)
$35,640,497
$31,570,365
MATURITY STRUCTURE OF BORROWINGS OUTSTANDING5 Twelve Months Ending 31 December 2009 2010 2011 2012 2013 Amount 6,877,509 6,723,106 4,981,028 3,262,047 3,102,338 Five Years Ending 31 December 2018 2023 2028 2033 over 2034 Total
1
Amount 8,233,829 215,601 2,237,164 39,247 $35,671,869
Reported at Fair Value upon adoption of FAS 157/159 effective 1 January 2008, except for unswapped borrowings which are reported at net of principal amount and unamortized discount/premium of zero coupon bonds. The aggregate face amounts and discounted values of zero coupon and deep discount borrowings (in United States dollar equivalents) are: Aggregate Face Amount Discounted Value Australian dollar Canadian dollar Philippine peso South African rand Swiss franc Turkish lira United States dollar 2008 $1,188,688 657,516 52,615 386,809 461,212 712,080 1,898,326 2007 $1,506,016 814,913 60,643 161,672 434,223 255,334 1,977,963 2008 $1,040,308 554,656 44,914 305,381 320,561 552,518 1,445,211 2007 $1,258,707 660,746 47,538 125,014 286,703 217,699 1,229,074
2 3
Include currency and interest rate swaps. At 31 December 2008, the remaining maturity of swap agreements ranged from less than one year to 35 years. Approximately 81.57% of the swap receivables and 87.29% of the payables are due before 1 January 2014. Adjusted by the cumulative effect of the adoption of FAS 133 effective 1 January 2001.
Annual Report 2008
45
OCR-6
Net Currency Obligation3 2008

$ (84,397) (168,609) 142,661 (3,048) (1,772) 100,248 4,827,110 39,727 24,456 (1,867) (262) (11,304) 33,228 114,758 (3,855) (13,871) 414,266 (1,997) 81,909 31,221,216 $ 36,708,597 $
Weighted Average Cost (%) After Swaps4

(11.75) 3.67 4.43 0.63 0.18 7.39 1.18 6.69 0.47 0.05 0.10 (6.50) 3.11 11.80 1.93 3.88 5.33 30.17 (0.06) 3.62 3.32
2007
265,986 4,870 151,272 1,298 (7,291) 143,175 4,092,807 49,776 720 2,535 (1,264) 38,553 177,902 (12,267) 108,202 374,924 (6,975) (8,865) 25,162,049 $ 30,537,407
2.54 (1.75) 4.11 INTEREST RATE SWAP ARRANGEMENTS Average Rate (%) Pay Receive Fixed Floating6 2.64 3.34 4.40 5.40 3.51 2.14 0.88 1.91 0.62 0.66 4.26 3.62 7.77 4.92 2.64 0.60 0.59 2.82
Notional Amount Receive Fixed Swaps: Australian dollar8 Chinese yuan Euro9 Indian rupee Philippine peso United States dollar United States dollar10 Receive Floating Swaps: Japanese yen United States dollar Total
4
Maturing Through7 2027-2032 2015 2010 2014 2010 2009-2043 2016-2027 2009-2032 2011
55,350 146,299 110,699 103,167 34,362 11,151,658 55,350 742,237 1,000,000
$13,399,122
Calculation is based on average carry book value of borrowings net of fair value of swaps. Thus, the weighted average cost may be negative if the related swaps payable exposure is in a different currency and the fair value of swaps receivable exceeds the carry book value of borrowings. 5 Bonds with put and call options were considered maturing on the first put or call date. 6 Represent average current floating rates, net of spread. 7 Swaps with early termination date were considered maturing on the first termination date. 8 Consists of dual currency swaps with interest receivable in Australian dollar and interest payable in Japanese yen. 9 Consists of dual currency swap with interest receivable in Euro and interest payable in Japanese yen. 10 Consists of dual currency swaps with interest receivable in United States dollar and interest payable in Japanese yen. The accompanying notes are an integral part of these financial statements (OCR-8).
46

STATEMENT OF SUBSCRIPTIONS TO CAPITAL STOCK AND VOTING POWER 31 December 2008 Expressed in Thousands of United States Dollars (Note B)
Number of Shares 1,195 10,557 204,740 15,736 36,128 220 12,462 1,750 228,000 94 2,406 12,081 19,270 224,010 192,700 552,210 28,536 142 178,246 10,582 492 96,350 142 94 142 532 19,270 142 5,202 54,340 77,080 114 3,320 84,304 116 12,040 236 20,520 38,540 10,134 48,174 350 142 8,958 50 23,834 236 12,076 Percent of Total 0.034 0.298 5.773 0.444 1.019 0.006 0.351 0.049 6.429 0.003 0.068 0.341 0.543 6.317 5.434 15.571 0.805 0.004 5.026 0.298 0.014 2.717 0.004 0.003 0.004 0.015 0.543 0.004 0.147 1.532 2.174 0.003 0.094 2.377 0.003 0.340 0.007 0.579 1.087 0.286 1.358 0.010 0.004 0.253 0.001 0.672 0.007 0.341 63.390 SUBSCRIBED CAPITAL Par Value Of Shares Total Callable Paid-in $ 18,496 163,402 3,168,986 243,563 559,193 3,405 192,888 27,087 3,529,007 1,455 37,240 186,991 298,263 3,467,249 2,982,630 8,547,162 441,683 2,198 2,758,909 163,789 7,615 1,491,315 2,198 1,455 2,198 8,234 298,263 2,198 80,517 841,080 1,193,052 1,765 51,387 1,304,866 1,795 186,356 3,653 317,611 596,526 156,855 745,642 5,417 2,198 138,653 774 368,905 3,653 186,914 $ 12,584 151,918 2,947,061 226,429 520,033 3,049 179,329 22,474 3,281,806 1,362 34,625 173,850 277,368 3,224,444 2,773,768 7,948,593 410,742 2,043 2,565,727 152,320 6,795 1,386,869 2,043 1,362 2,043 7,662 277,368 2,043 74,868 782,186 1,109,501 1,641 47,812 1,213,499 1,610 173,308 3,405 295,369 554,766 145,819 693,419 5,030 2,043 128,902 712 343,072 3,405 165,476 $ 5,913 11,485 221,925 17,134 39,160 356 13,559 4,612 247,201 93 2,616 13,141 20,895 242,805 208,861 598,569 30,941 155 193,182 11,469 820 104,446 155 93 155 573 20,895 155 5,650 58,894 83,551 124 3,575 91,367 186 13,048 248 22,242 41,760 11,036 52,223 387 155 9,751 62 25,833 248 21,437 VOTING POWER Number of Votes 14,427 23,789 217,972 28,968 49,360 13,452 25,694 14,982 241,232 13,326 15,638 25,313 32,502 237,242 205,932 565,442 41,768 13,374 191,478 23,814 13,724 109,582 13,374 13,326 13,374 13,764 32,502 13,374 18,434 67,572 90,312 13,346 16,552 97,536 13,348 25,272 13,468 33,752 51,772 23,366 61,406 13,582 13,374 22,190 13,282 37,066 13,468 25,308 2,883,131 Percent of Total 0.325 0.537 4.917 0.653 1.114 0.303 0.580 0.338 5.442 0.301 0.353 0.571 0.733 5.352 4.646 12.756 0.942 0.302 4.320 0.537 0.310 2.472 0.302 0.301 0.302 0.310 0.733 0.302 0.416 1.524 2.037 0.301 0.373 2.200 0.301 0.570 0.304 0.761 1.168 0.527 1.385 0.306 0.302 0.501 0.300 0.836 0.304 0.571 65.040
MEMBERS REGIONAL Afghanistan Armenia Australia Azerbaijan Bangladesh Bhutan Brunei Darussalam Cambodia China, Peoples Rep. of Cook Islands Fiji Islands Georgia Hong Kong, China India Indonesia Japan Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao PDR Malaysia Maldives Marshall Islands Micronesia, Fed. States of Mongolia Myanmar Nauru Nepal New Zealand Pakistan Palau Papua New Guinea Philippines Samoa Singapore Solomon Islands Sri Lanka Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkmenistan Tuvalu Uzbekistan Vanuatu Viet Nam
Total Regional (Forward) 2,247,995
34,794,691
32,341,552
2,453,140
Annual Report 2008
47
OCR-7
MEMBERS Total Regional (Forward) NONREGIONAL Austria Belgium Canada Denmark Finland France Germany Ireland Italy Luxembourg The Netherlands Norway Portugal Spain Sweden Switzerland Turkey United Kingdom United States Total Nonregional TOTAL
Number of Shares 2,247,995 12,040 12,040 185,086 12,040 12,040 82,356 153,068 12,040 63,950 12,040 36,294 12,040 12,040 12,040 12,040 20,650 12,040 72,262 552,210 1,298,316 3,546,311
Percent of Total 63.390 0.340 0.340 5.219 0.340 0.340 2.322 4.316 0.340 1.803 0.340 1.023 0.340 0.340 0.340 0.340 0.582 0.340 2.038 15.571 36.610 100.000
SUBSCRIBED CAPITAL Par Value Of Shares Total Callable Paid-in 34,794,691 186,356 186,356 2,864,780 186,356 186,356 1,274,714 2,369,202 186,356 989,824 186,356 561,762 186,356 186,356 186,356 186,356 319,623 186,356 1,118,478 8,547,162 20,095,465 $54,890,156 32,341,552 173,308 173,308 2,664,168 173,308 173,308 1,185,437 2,203,277 173,246 920,498 173,246 522,432 173,308 173,246 173,308 173,308 297,226 173,308 1,040,159 7,948,593 18,687,995 $51,029,546 2,453,140 13,048 13,048 200,612 13,048 13,048 89,278 165,925 13,110 69,326 13,110 39,330 13,048 13,110 13,048 13,048 22,397 13,048 78,319 598,569 1,407,470 $3,860,610
VOTING POWER Number of Votes 2,883,131 25,272 25,272 198,318 25,272 25,272 95,588 166,300 25,272 77,182 25,272 49,526 25,272 25,272 25,272 25,272 33,882 25,272 85,494 565,442 1,549,724 Percent of Total 65.040 0.570 0.570 4.474 0.570 0.570 2.156 3.752 0.570 1.741 0.570 1.117 0.570 0.570 0.570 0.570 0.764 0.570 1.929 12.756 34.960
4,432,855 100.000
Note: Figures may not add due to rounding. The accompanying notes are an integral part of these financial statements (OCR-8).
48

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 NOTE ANATURE OF OPERATIONS AND LIMITATIONS ON LOANS, GUARANTEES AND EQUITY INVESTMENTS Nature of Operations The Asian Development Bank (ADB), a multilateral development financial institution, was established in 1966 with its headquarters in Manila, Philippines. ADB and its operations are governed by the Agreement Establishing the Asian Development Bank (the Charter). Its purpose is to foster economic development and co-operation in the Asian and Pacific region and to contribute to the acceleration of the process of economic development of the developing member countries (DMCs) in the region, collectively and individually. With the adoption of its poverty reduction strategy at the end of 1999, ADB made reducing poverty in the region its main goal. ADB provides financial and technical assistance (TA) for projects and programs, which will contribute to achieving this purpose. Mobilizing financial resources, including cofinancing, is an integral part of ADB's operational activities. In addition, ADB, alone or jointly, administers on behalf of donors, including members, their agencies and other development institutions, funds restricted for specific uses, which include TA grants as well as regional programs. ADB's ordinary operations comprise loans, equity investments, and guarantees. During the years 2001 and 2002, limited technical assistance to member countries to support high priority TA programs was included. ADB finances its ordinary operations through borrowings, paid-in capital, and reserves. Limitations on Loans, Guarantees, and Equity Investments Article 12, paragraph 1 of the Charter provides that the total amount outstanding of loans, equity investments, and guarantees made by ADB shall not exceed the total of ADB's unimpaired subscribed capital, reserves, and surplus, exclusive of the special reserve. In December 2008, the Board of Directors approved the revised policy on ADBs lending limitations, which limits the total amount of disbursed loans, approved equity investments, and the maximum amount that could be demanded from ADB under its guarantee portfolio, to the total amount of ADB's unimpaired subscribed capital, reserves and surplus. At 31 December 2008 and 2007, the total of such loans, equity investments, and guarantees aggregated approximately 55.7% and 46.9%, respectively, of the total subscribed capital, reserves, and surplus as defined, based on this new policy. Article 12, paragraph 3 of the Charter provides that equity investments shall not exceed 10% of the unimpaired paid-in capital together with reserves and surplus, exclusive of the special reserve. At 31 December 2008, such equity investments represented approximately 6.1% (7.6% - 2007) of the paid-in capital, reserves, and surplus, as defined. NOTE BSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Functional Currencies and Reporting Currency The currencies of members are all functional currencies as these are the currencies of the primary economic environment in which ADB generates and expends cash. The reporting currency is the United States dollar (USD). Translation of Currencies ADB adopts the use of daily exchange rates for accounting and financial reporting purposes. This allows transactions in currencies other than USD to be translated to the reporting currency using exchange rates applicable at the time of transactions. At the end of each accounting month, translations of assets, liabilities, capital, and reserves denominated in non-USD are adjusted using the applicable rates of exchange at the end of the reporting period. These translation adjustments, other than those relating to the non-functional currencies (Note M) and to the maintenance of Special Drawing Right (SDR) capital values (Notes K and L), are charged or credited to Accumulated translation adjustments and reported in CAPITAL AND RESERVES as part of Accumulated other comprehensive income. Valuation of Capital Stock The authorized capital stock of ADB is defined in Article 4, paragraph 1 of the Charter in terms of United States dollars of the weight and fineness in effect on 31 January 1966 (the 1966 dollar) and the value of each share is
Annual Report 2008
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OCR-8
31 December 2007 and 2006 defined as 10,000 1966 dollars. The capital stock had historically been translated into the current United States dollar (ADB's unit of account) on the basis of its par value in terms of gold. From 1973 until 31 March 1978, the rate arrived at on this basis was $1.20635 per 1966 dollar. Since 1 April 1978, at which time the Second Amendment to the Articles of Agreement of the International Monetary Fund (IMF) came into effect, currencies no longer have par values in terms of gold. Pending ADB's selection of the appropriate successor to the 1966 dollar, the capital stock has been valued for purposes of these financial statements in terms of the SDR at the value in current United States dollars as computed by the IMF, with each share valued at SDR10,000. As of 31 December 2008, the value of the SDR in terms of the current United States dollar was $1.54781 ($1.57848 2007) giving a value for each share of ADB's capital equivalent to $15,478.10 ($15,784.80 2007). However, ADB could decide to fix the value of each share at $12,063.50 based on the 31 March 1978 par value of the United States dollar in terms of gold. Derivative Financial Instruments ADB reports all derivative transactions in accordance with Statement of Financial Accounting Standards (FAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, along with its amendments, collectively referred as FAS 133. FAS 133 requires that derivative instruments be recorded in the Balance Sheet as either assets or liabilities measured at fair value. The initial application of FAS 133 in January 2001 gave rise to a transition loss of $81,657,000 in other comprehensive income and a gain of $34,656,000 was reported in net income. The amount recorded in other comprehensive income as transition loss is being reclassified into earnings in the same period or periods in which the underlying transactions affect earnings. In applying FAS 133 for purposes of financial statement reporting, ADB has elected not to define any qualifying hedging relationships. Rather, all derivative instruments, as defined by FAS 133, have been marked to fair value, and all changes in fair value have been recognized in net income. ADB has elected not to define any qualifying hedging relationships, not because economic hedges do not exist, but rather because the application of FAS 133 hedging criteria does not make fully evident ADBs risk management strategies.
CONTINUED In February 2006, the Financial Accounting Standards Board issued FAS 155, Accounting for Certain Hybrid Financial Instruments, an amendment of FASB Statements No. 133 and 140. ADB decided to early adopt the provisions which allow hybrid financial instruments that contain embedded derivatives requiring bifurcation under FAS 133 to be measured at fair value, effective 1 January 2006. With this, FAS 133 as presented in ADBs financial statements incorporates the provisions of FAS 155. ADB issues hybrid instruments, i.e. structured debts, to lower its cost of borrowings, which are generally fully hedged through derivative transactions. ADB measures and reports any of its qualified bifurcable structured debts and their corresponding derivatives at fair value with changes in fair value recognized in net income. This consistent accounting treatment would fully capture the economic hedging relationship between the hybrid instruments and their derivatives. Investments All investment securities and negotiable certificate of deposits held by ADB other than derivative instruments are considered by Management to be Available for Sale and are reported at estimated fair value, which represents their fair market value. Time deposits are reported at cost, which is a reasonable estimate of fair value. Unrealized gains and losses are reported in CAPITAL AND RESERVES as part of Accumulated other comprehensive income. Realized gains and losses are included in income from investments and are measured by the difference between amortized cost and the net proceeds of sales. With respect to exchange traded futures, realized gains or losses are reported based on daily settlement of the net cash margin. Interest income on investment securities and time deposits is recognized as earned and reported, net of amortizations of premiums and discounts. Unrealized losses on investment securities are assessed to determine whether the impairment is deemed to be other than temporary. If the impairment is deemed to be other than temporary, the investment is written down to the impaired value, which becomes the new cost basis of the investments. Impairment losses are not reversed for subsequent recoveries in the value of the investments, until it is sold.
50

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 Securities Transferred Under Repurchase Agreement and Securities Purchased Under Resale Arrangement ADB accounts for transfers of financial assets in accordance with FAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities - a replacement of FAS 125. In general, transfers are accounted for as sales when control over the transferred assets has been relinquished. Otherwise the transfers are accounted for as repurchase/resale agreements and collateralized financing arrangements. Under repurchase agreements, securities transferred are recorded as assets and reported at estimated fair value and cash collateral received are recorded as liabilities. ADB monitors the fair value of the securities transferred under repurchase agreements and the collateral. Under resale arrangements, securities purchased are recorded as assets, while securities received are not recorded as liabilities and are not re-pledged. All outstanding securities as of 31 December 2008 and 2007 classified under securities transferred under repurchase agreement correctly reflect the nature of the transactions. Loans ADB's loans are made to or guaranteed by members, with the exception of nonsovereign loans, and have maturities ranging between 3 and 32 years. ADB requires its borrowers to absorb exchange risks attributable to fluctuations in the value of the currencies which it has disbursed. Loan interest income and loan commitment fees are recognized on accrual basis. In line with ADB's principle of cost pass through pricing, any variation in the actual cost of borrowings is passed to LIBOR-based borrowers as surcharge or rebate. It is the policy of ADB to place loans in non-accrual status for which principal, interest, or other charges are overdue by six months. Interest and other charges on non-accruing loans are included in income only to the extent that payments have been received by ADB. ADB maintains a position of not taking part in debt rescheduling agreements with respect to sovereign loans. In the case of nonsovereign loans, ADB may agree to debt rescheduling only after alternative courses of action have been exhausted. ADB determines that a loan is impaired and therefore subject to provisioning when principal or interest is in arrears for one year for sovereign loans (unless there is clear and convincing evidence warranting the deferment or acceleration of such provisioning) and six months for nonsovereign loans. If the present value of expected future cash flows discounted at the loans effective interest rate is less than the carrying value of the loan, a valuation allowance is established with a corresponding charge to provision for loan losses. ADBs periodic evaluation of the adequacy of the provision for loan losses is based on its past loan loss experience, known and inherent risks in existing loans, and adverse situations that may affect a borrowers ability to repay. In December 2006, the Board approved the application of the concept of expected loss for nonsovereign credit exposure to establish loss provision and loss reserve, the same concept that was applied to sovereign operations in 2004. In line with accounting principles generally accepted in the United States of America, the amount of expected loss pertaining to credit exposures that are impaired and rated substandard or worse is charged to the income statement, following the discounted cash flow method described above, while those that are better are recorded as loss reserve in the equity section of the balance sheet. Any adjustment to loan loss reserve following this new methodology is subject to the approval of the Board of Governors. Effective 2000, ADB levies front-end fees on all new sovereign loans. These fees are deferred and amortized over the life of the loans after offsetting deferred direct loan origination costs. In 2004, ADB waived the entire front-end fee on all new sovereign loans approved during the year. Subsequently, the policy was extended to cover the period up to June 2009. In December 2007, the Board approved the elimination of front-end fees on sovereign LIBOR-based loans negotiated on and after 1 October 2007. ADB levies a commitment charge on the undisbursed balance of effective loans. Unless otherwise provided by the loan agreement, the charges take effect commencing on the 60th day after the loan signing date and are credited to loan income. Guarantees ADB extends guarantees to sovereign and nonsovereign borrowers. Guarantees are regarded as outstanding when the underlying financial obligation of the borrower is incurred. ADB would be required to perform under its
Annual Report 2008
51
OCR-8
31 December 2007 and 2006 guarantees if the payments guaranteed were not made by the debtor, and the guaranteed party called the guarantee by demanding payments from ADB in accordance with the term of the guarantee. Prior to 1 January 2003, guarantees in the absence of any call, were not reflected in the financial statements but disclosed as a note to the financial statements (Note F) in accordance with the provisions of FASB No. 5, Accounting for Contingencies. FASB Interpretation No. 45 (FIN 45), Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, which came into effect in 2003, requires the recognition of two types of liabilities that are associated with guarantees: (a) the stand-by ready obligation to perform, and (b) the contingent liability. ADB recognizes at the inception of a guarantee, a liability for the stand-by ready obligation to perform on guarantees issued and modified after 31 December 2002. The liability is included in Miscellaneous liabilities. Front-end fee income on guarantees received is deferred and amortized over the term of the guarantee contract and the unamortized balance of deferred frontend fee of guarantee is included in Miscellaneous liabilities. Equity Investments Borrowings All equity investments are considered as Available for Sale and are reported at estimated fair value. Investments in equity securities with readily determinable market price are reported at fair value, with unrealized gains and losses reported in CAPITAL AND RESERVES as part of Accumulated other comprehensive income. Investments in equity securities without readily determinable fair values are reported at cost or at impaired value, for investments where the impairment is deemed other than temporary. These investments are assessed each quarter to reflect the amount that can be realized using valuation techniques appropriate to the market and industry of each investment. When impairment is identified and is deemed to be other than temporary, the equity investment is written down to the impaired value, which becomes the new cost basis of the equity investments. Impairment losses are not reversed for subsequent recoveries in the value of the equity investments, until it is sold.
CONTINUED ADB applies the equity method of accounting to investments in limited liability partnerships (LLPs) and certain limited liability companies (LLCs) that maintain a specific ownership account for each investor. Variable Interest Entities ADB complies with FIN 46R, Consolidation of Variable Interest Entities an interpretation of ARB No. 51, Consolidated Financial Statements. FIN 46 requires an entity to consolidate and provide disclosures for any VIE for which it is the primary beneficiary. An entity that will absorb a majority of VIEs expected losses or receive a majority of expected residual return is deemed to be the primary beneficiary of the VIE. Variable interests can arise from equity investments, loans, and guarantees. ADB is required to disclose information about its involvement in VIE where ADB holds significant variable interest (Note S). Property, Furniture, and Equipment Property, furniture, and equipment are stated at cost and, except for land, depreciated over estimated useful lives on a straight-line basis. Maintenance, repairs, and minor betterments are charged to expense.
Borrowings are generally reported on the balance sheet at their carrying book value, adjusted for any unamortized discounts or premium. As part of its borrowing strategy, ADB issues various types of contractual obligations, which include structured debts containing embedded derivatives in order to minimize the cost of borrowings. ADB simultaneously enters into currency and/or interest rate swaps to fully hedge the debt. Upon the adoption of FAS 155 on 1 January 2006, ADB no longer bifurcates and fair values the embedded derivatives (the debt was valued at its carrying book value) in the structured debt portfolio that meet the bifurcation criteria under FAS 133. Instead, ADB measures and reports at fair value any structured debt that contains embedded derivatives that would otherwise be bifurcated under FAS 133 as a whole, with changes in fair value reported in net income. Effective 1 January 2008, ADB adopted the provisions of FAS 159 for non-hybrid borrowings that are
52

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 swapped. Further information relating to the adoption of FAS 159 and the reasons for electing FAS 159 for these financial instruments are discussed in detail in Note P. Borrowing valuations are further adjusted for the credit spread by currency. Accounting Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the end of the year and the reported amounts of revenues and expenses during the year. The actual results could differ from those estimates. Accounting and Reporting Developments Effective 1 January 2008, ADB adopted FAS 157 and FAS 159. FAS 157 defines fair value (FV) which focuses on the price that would be received to sell the asset or paid to transfer the liability (exit price) and establishes a framework for measuring FV through a FV hierarchy that ranks the quality and reliability of the data used in FV measurements. FAS 159 expands the scope of financial instruments that may be carried at FV. It offers an irrevocable option to carry the majority of financial assets and liabilities at FV, on an instrument-by-instrument basis, with changes in FV recognized in earnings. Fair Value Option may be elected at the time an entity recognizes an eligible financial asset or liability. FAS 159 also allows a one time election for existing financial assets and liabilities, on an instrumentby-instrument basis, at the initial adoption date. The adoption of FAS 157 and 159 was applied prospectively and the cumulative effect of changes in valuation of the financial assets and liabilities for which the Fair Value Option have been elected were reported as an adjustment to the 1 January 2008 balance of reserves. In March 2008, the Financial Accounting Standards Board (FASB) issued Statement No. 161 Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133, which will be applicable for fiscal years beginning after 15 November 2008 and interim periods within those fiscal years. This statement amends and expands the disclosure requirements of FAS 133 to provide users with better understanding of (i) how and why an entity uses derivatives; (ii) how derivative instruments and related hedged items are accounted for under FAS 133 and its related interpretations; and (iii) how derivative instruments and hedged items affect an entitys financial position, performance, and cash flows. ADB is currently assessing the impact of this standard on its financial statements. In December 2008, the FASB issued FASB Staff Position (FSP) FAS 132(R)-1, which amends 132(R) to require more detailed disclosures about employers' plan assets, including employers' investment strategies, major categories of plan assets, concentration of risk within plan assets, and valuation techniques used to measure the fair value of plan assets. This aims to address financial statement users' concerns about the lack of transparency surrounding the types of assets and associated risks in an employer's defined benefit pension or other postretirement plan and events in the economy and markets that could have a significant effect on the value of the plan assets. An entity must provide the FSP's disclosures in financial statements for fiscal years ending after 15 December 2009. Statement of Cash Flows For the purposes of the Statement of Cash Flows, ADB considers that its cash and cash equivalents are limited to DUE FROM BANKS. Reclassification Certain non-material reclassifications of prior years amounts and information have been made to conform to the current years presentation. NOTE CRESTRICTIONS ON USE OF CURRENCIES AND DEMAND OBLIGATIONS OF MEMBERS In accordance with Article 24, paragraph 2(i) of the Charter, the use by ADB or by any recipient from ADB of certain currencies may be restricted by members to payments for goods or services produced and intended for use in their territories. With respect to the currencies of 42 DMCs for 2008 (44 - 2007), cash in banks (due from banks) and demand obligations totaling $70,095,000 ($65,915,000 2007) and $144,515,000 ($174,805,000 2007), respectively, may be, but are not currently so restricted.
Annual Report 2008
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OCR-8
31 December 2007 and 2006 In accordance with Article 24, paragraphs 2(i) and (ii) of the Charter, one member (one - 2007) has restricted the use by ADB or by any recipient from ADB of its currency to payments for goods or services produced in its territory. As such, cash in banks (due from banks) and investments totaling $20,000 ($20,000 - 2007) and $3,182,000 ($3,082,000 - 2007), respectively, have been restricted. None of the demand obligations held by ADB in 2008 and in 2007 was restricted. NOTE DINVESTMENTS The main investment management objective is to maintain security and liquidity. Subject to these parameters, ADB seeks the highest possible return on its investments. Investments are governed by the Investment Authority approved by the Board of Directors in 1999, and reviewed in 2006. The review endorsed a portfolio strategy that is largely consistent with the 1999 approach. ADB may purchase and sell exchange traded financial futures and option contracts, and enter into currency and interest rate swaps, and forward rate agreements. Exposure to interest rate risk may be adjusted within defined bands to reflect changing market conditions. These adjustments are made through the purchase and sale of securities, and financial futures. Accordingly, financial futures are held for risk management purposes. At 31 December 2008, the notional amount of outstanding purchase and sales futures contracts were $6,300,000 and $7,000,000, respectively, ($99,300,000 and $54,200,000, respectively 2007). Included in Other securities as of 31 December 2008 were corporate bonds and other obligations of banks amounting to $6,688,083,000 ($2,622,373,000 2007) and asset/mortgage-backed securities of $758,066,000 ($838,716,000 2007). The currency compositions of the investment portfolio as of 31 December 2008 and 2007 expressed in United States dollars are as follows:
CONTINUED
Currency Australian dollar Canadian dollar Euro Japanese yen Pound sterling Swiss franc United States dollar Others Total $
2008 412,599,000 261,180,000 898,121,000 1,277,485,000 208,158,000 463,590,000 11,407,590,000 483,796,000 $
2007 462,654,000 306,592,000 854,590,000 928,670,000 288,721,000 457,381,000 9,480,057,000 518,278,000
$15,412,519,000
$13,296,943,000
The estimated fair value and amortized cost of the investments by contractual maturity at 31 December 2008 are as follows:
Estimated Fair Value Due in one year or less Due after one year through five years Due after five years through ten years Total $ 6,119,336,000 6,802,245,000 2,490,938,000 $15,412,519,000 Amortized Cost $ 6,100,549,000 6,595,104,000 2,393,526,000 $15,089,179,000
Additional information relating to investments in government and government-guaranteed obligations and other securities are as follows:
2008 As of 31 December: Amortized cost Estimated fair value Gross unrealized gains Gross unrealized losses For the years ended 31 December: Change in net unrealized gains from prior year Proceeds from sales Gross gain on sales Gross loss on sales 2007
$13,607,809,000 13,931,149,000 364,824,000 (41,484,000)
$5,770,063,000 5,805,057,000 60,811,000 (25,817,000)
288,346,000 7,979,848,000 53,508,000 (81,408,000)
76,994,000 8,205,482,000 13,466,000 (19,411,000)
54

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 As of 31 December 2008, gross unrealized losses amounted to $41,484,000 ($25,817,000 2007) from government and government-guaranteed obligations, corporate bonds, and mortgage/asset-backed securities. One government and government-guaranteed obligation (12 2007), five corporate obligations (32 - 2007), and 11 mortgage/asset-backed securities (75 2007) sustained unrealized losses for over one year, representing 3.70% (9.34% - 2007) of the total investments. Comparative details for 2008 and 2007 are as follows:
One year or less For the year 2008 Fair Value Unrealized Losses Fair Value
Over one year Unrealized Losses Fair Value
Total Unrealized Losses
Government and government guaranteed obligations Corporate bonds Mortgage/Asset-backed securities Total
$ 67,243,000 546,087,000 255,292,000 $868,622,000
215,000 6,431,000 23,525,000
$ 239,844,000 320,160,000 10,241,000 $ 570,245,000
897,000 2,552,000 7,864,000
$ 307,087,000 866,247,000 265,533,000 $1,438,867,000
$ 1,112,000 8,983,000 31,389,000 $41,484,000
$30,171,000
$11,313,000
Government and governmentguaranteed obligations Corporate bonds Mortgage/Asset-backed securities Options Total
$290,291,000 507,085,000 119,347,000 300,000 $917,023,000
$ 5,814,000 3,835,000 2,980,000 50,000 $12,679,000
$ 460,364,000 627,532,000 153,954,000 $1,241,850,000
$ 6,816,000 3,301,000 3,021,000 $13,138,000
$ 750,655,000 1,134,617,000 273,301,000 300,000 $2,158,873,000
$12,630,000 7,136,000 6,001,000 50,000 $25,817,000
Asset/Mortgage-backed Securities: Asset/Mortgagebacked securities are instruments whose cash flow is based on the cash flows of a pool of underlying assets or mortgage loans managed by a trust. Exchange Traded Futures: Futures are contracts for delayed delivery of securities or money market instruments in which the seller agrees to make delivery at a specified future date of a specified instrument at a specified price or yield. Initial margin requirements are met with cash or securities, and changes in the market prices are generally settled daily in cash. ADB generally closes out open positions prior to maturity. Therefore, cash receipts or payments are limited to the change in market value of the future contracts. As of 31 December 2008, net receipts on future contracts amounted to $1,082,000 ($372,000 net payments 2007).
NOTE ELOANS Loans ADB does not sell its sovereign loans, nor does it believe there is a market for its sovereign loans. The estimated fair value of all loans is based on the estimated cash flows from principal repayments, interest and other charges discounted at the applicable market yield curves for ADBs borrowing cost plus lending spread. The carrying amount and estimated fair value of loans outstanding at 31 December 2008 and 2007 are as follows:
Annual Report 2008
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OCR-8
31 December 2007 and 2006

2008 Carrying Value Fixed rate multicurrency loans Pool-based single currency (JPY) loans Pool-based single currency (US$) loans LIBOR-based loans Fixed rate loans Local currency loans Total $ 22,246,000 3,202,996,000 7,049,324,000 25,219,728,000 11,470,000 404,296,000 $ Estimated Fair Value 27,157,000 3,683,699,000 8,609,127,000 25,084,442,000 12,806,000 413,728,000 $ Carrying Value 22,462,000 3,138,612,000 7,716,536,000 19,135,910,000 15,587,000 253,772,000 $ 2007
CONTINUED
Estimated Fair Value 28,279,000 3,594,501,000 8,537,918,000 19,012,074,000 17,811,000 270,787,000
$35,910,060,000
$37,830,959,000
$30,282,879,000
$31,461,370,000
Prior to 1 July 1986, the lending rate of ADB was based on a multicurrency fixed lending rate system under which loans carried interest rates fixed at the time of loan approval for the entire life of the loans. Effective 1 July 1986, ADB adopted a multicurrency pool-based variable lending rate system. In addition, in July 1992, ADB introduced a United States dollar pool-based variable lending rate system, and in November 1994, a marketbased lending rate system was made available to financial intermediaries of sovereign and nonsovereign borrowers. The outstanding balances of pool-based multicurrency loans were subsequently transformed into pool-based single currency loans in Japanese yen, effective 1 January 2004. Commencing 1 July 2001, ADB offered LIBOR-based loans (LBLs) in the following currencies Euro, Japanese yen, and United States dollar. The LBL lending facility offers borrowers the flexibility of (i) choice of currency and interest rate basis; (ii) change the original loan terms (currency and interest rate basis) at any time during the life of the loan; and (iii) options to cap or collar the floating lending rate at any time during the life of the loan. With the introduction of LBLs, all other loan windows are no longer offered to borrowers. In November 2002, ADB offered local currency loans (LCLs) to nonsovereign borrowers. In August 2005, ADB also offered LCLs to sovereign borrowers. In November 2006, ADB introduced series of enhancements to sovereign LBLs negotiated after 1 January 2007, offering additional major currencies that ADB can efficiently intermediate, and additional repayment options including (i) annuity method with various discount factors, (ii) straight-line repayment, (iii) bullet repayment, and (iv) custom-tailored repayment. In 2008, ADB received prepayments for 11 loans (6 loans 2007) amounting to $277,053,000 ($80,139,000 2007) and collected prepayment premiums of $3,937,000
($210,000 - 2007). Ninety percent of the prepaid amounts in 2008 were pool-based single currency US dollar and Japanese yen loans compared to 87% for pool-based single currency US dollar loans in 2007. Loan Charges Since 1988, ADB has charged front-end fees for nonsovereign loans. Effective 1 January 2000, ADB levied front-end fee of 1% for sovereign loans for which the loan negotiations are completed after that date. In addition, a flat commitment fee of 0.75% was charged for new program loans and a progressive commitment fee of 0.75% was maintained for project loans. Effective 1 January 2000, the lending spread applied to all outstanding poolbased sovereign loans and new sovereign market-based loans was increased from 0.4% to 0.6%. In 2004, the Board approved the waiver of the entire 1% front-end fee on all new sovereign loans approved during 1 January 2004 to 30 June 2005 (waiver of 50 basis points on sovereign loans approved in 2003) and waiver of 20 basis points of the lending spread on sovereign loans outstanding from 1 July 2004 30 June 2005 for borrowers that do not have loans in arrears. Subsequently, the policy was extended to cover the period up to June 2009. The front-end fees received on nonsovereign loans for the year ended 31 December 2008 were $10,987,000 ($4,576,000 2007). Administrative expenses relating to direct loan origination of $35,540,000 for the year ended 31 December 2008 ($34,080,000 2007) were deferred and offset against front-end fees received. The excess, if any, is amortized over the life of each loan. In November 2006, the Board approved a change in the commitment charge policy for all sovereign project
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NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 LIBOR-based loans negotiated after 1 January 2007, from 75 basis points on a progressive structure of undisbursed loan balances to a flat fee of 35 basis points on the full amount of undisbursed balances. Further to this, the Board also approved in April 2007, the waiver of 10 basis points of the commitment charge on the undisbursed balances of sovereign project loans negotiated after 1 January 2007 and 50 basis points of the commitment charge on the undisbursed balances of sovereign program loans. In December 2007, the Board approved the revision of loan charges for sovereign LIBOR-based loans negotiated on and after 1 October 2007 by a) providing a credit of 0.4% for the duration of the loan, resulting to an effective contractual spread of 0.2%; b) reducing the commitment charge from 0.75% and 0.35% for sovereign program and project loans to 0.15% for both sovereign program and project loans; and c) eliminating front-end fees. Undisbursed loan commitments and an analysis of loans by borrowing member countries as of 31 December 2008 are shown in OCR-5. The carrying amounts of loan outstanding by loan products at 31 December 2008 and 2007 are as follows:
2008
Sovereign Loans Fixed rate multicurrency loans Pool-based single currency (JPY) loans Pool-based single currency (US$) loans LIBOR-based loans $ 22,246,000 3,202,996,000 7,054,332,000 23,901,052,000 34,180,626,000 Provision for loan losses Unamortized direct loan origination cost (4,356,000) 76,114,000 71,758,000 Subtotal Nonsovereign Loans Pool-based single currency (JPY) loans Fixed rate loans LIBOR-based loans Local currency loans Others 34,252,384,000 $
Loans in Non-accrual Status One nonsovereign loan was in non-accrual status as of 31 December 2008 (four 2007). The principal outstanding at that date was $1,674,000 ($16,507,000 2007) of which $1,315,000 ($9,659,000 - 2007) was overdue. Loans in non-accrual status resulted in $151,000 ($3,223,000 2007) not being recognized as income from nonsovereign loans for the year ended 31 December 2008, and a total of $525,000 as of 31 December 2008 ($8,314,000 2007). The significant decrease resulted mainly from the waiver of loan charges totaling $4,735,000 due to sale of two loans in January 2008 and restructuring of one loan in April 2008, and recovery of $2,717,000 from the restructured loan. In 2008, one sovereign loan was restored to accrual status and loan charges of $1,130,000 for 2007 was recognized as income for the current year. Loan Loss Provision ADB has not suffered any losses of principal on sovereign loans. During the year, $1,333,000 loan loss provision was written back on two loans ($427,000 on one loan 2007). Accumulated loan loss provision for sovereign loans as of 31 December 2008 was $4,356,000 ($5,689,000 2007). Loan loss provisions for nonsovereign loans totaling $4,968,000 were written back/off mainly due to sale of two loans. This reduced the balance of accumulated loan loss provision for nonsovereign loans to $4,818,000 as of 31 December 2008 ($9,354,000 2007). Information pertaining to loans which were subject to loan loss provisions at 31 December 2008 and 2007 is as follows:
2008 Loans not subject to loss provisions Loans subject to loss provisions Total Average amount of loans subject to loss provisions Related interest income on such loans recognized in the year Cash received on related interest income on such loans $35,841,044,000 9,928,000 $35,850,972,000 2007 $30,233,596,000 22,196,000 $30,255,792,000
2007
22,462,000 3,136,766,000 7,722,916,000 18,078,713,000 28,960,857,000 (5,689,000) 47,936,000 42,247,000 29,003,104,000
11,488,000 1,253,775,000 404,952,000 131,000 1,670,346,000
1,846,000 15,586,000 1,018,846,000 258,657,000 1,294,935,000 (9,354,000) (5,806,000) (15,160,000) 1,279,775,000 $30,282,879,000
Provision for loan losses Unamortized front-end fee
(4,818,000) (7,852,000) (12,670,000)
11,325,000
30,019,000
4,946,000
921,000
Subtotal Total
1,657,676,000 $35,910,060,000
4,933,000
782,000
Annual Report 2008
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OCR-8
31 December 2007 and 2006 The changes in the provision for loan losses during 2008 and 2007 are as follows:
2008 Sovereign Loans Balance 1 January Provision written back - net Provision written off Translation adjustment Balance 31 December $5,689,000 (1,333,000) $4,356,000 Nonsovereign Loans $9,354,000 (2,134,000) (2,400,000) (2,000) $4,818,000 Total $15,043,000 (3,467,000) (2,400,000) (2,000) $9,174,000 Sovereign Loans $6,116,000 (427,000) $5,689,000 2007
CONTINUED
Nonsovereign Loans $22,223,000 (152,000) (12,717,000) $9,354,000
Total $28,339,000 (579,000) (12,717,000) $15,043,000
Cofinancing ADB functions as lead lender in cofinancing arrangements with other participating financial institutions who also provide funds to ADBs sovereign and nonsovereign borrowers. In such capacity, ADB provides loan administration services, which include loan disbursements and loan collections. The participating financial institutions have no recourse to ADB for their outstanding loan balances. Loans administered by ADB on behalf of participating institutions as at 31 December 2008 and 2007 are as follows:
2008 Amount Sovereign loans Nonsovereign loans Total $503,017,000 403,517,000 $906,534,000 No.of Loans 36 10 46
During the year ended 31 December 2008, a total of $115,000 ($490,000 - 2007) was received as compensation for arranging and administering such loans. This amount has been included in Income from other sources. NOTE FGUARANTEES ADB extends guarantees to public sector and private sector borrowers. Such guarantees include (i) partial credit guarantees where only certain principal and/or interest payments are covered; and (ii) political risk guarantees, which provide coverage against well-defined sovereign risks. While counterguarantees from the host government are required for all public sector guarantees, guarantees for private sector projects may be provided with or without a host government counterguarantee. A counterguarantee takes the form of a member government agreement to indemnify ADB for any payments it makes under the guarantee. In the event that a guarantee is called, ADB has the contractual right to require payment from the government, on demand, or as ADB may otherwise direct. Guaranteed payments under partial credit guarantees are generally due 10 or more years from the loan inception date. ADBs political risk guarantee is callable when a guaranteed event has occurred and such an event has resulted in debt service default to the guaranteed lender. In October 2008, ADB paid a total of PKR10,375,000 ($127,000 equivalent) under a partial credit guarantee agreement. The amount was booked as a loan arising from a guarantee call with a corresponding 100% provision for losses.
2007 Amount Sovereign loans Nonsovereign loans Total $527,247,000 432,865,000 $960,112,000 No.of Loans 32 12 44
58

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 The committed and outstanding amounts of these guarantee obligations as of 31 December 2008 and 2007 covered:
2008 Committed Amount Partial Credit Guarantees with counterguarantee without counterguarantee Outstanding Amount Committed Amount 2007 Outstanding Amount
$1,164,044,000 432,363,000 1,596,407,000
$1,097,258,000 363,075,000 1,460,333,000
$1,001,492,000 280,863,000 1,282,355,000
$ 962,160,000 271,881,000 1,234,041,000
Political Risk Guarantees with counterguarantee without counterguarantee
145,156,000 30,070,000 175,226,000
129,419,000 24,899,000 154,318,000 950,000 $1,615,601,000
146,813,000 30,462,000 177,275,000 950,000 $1,460,580,000
134,210,000 27,306,000 161,516,000 950,000 $1,396,507,000
Others Total
950,000 $1,772,583,000
None of the outstanding amounts as of 31 December 2008 were subject to call. The committed amount represents the maximum potential amount of undiscounted future payment that ADB could be required to make, inclusive of standby portion for which ADB is committed but not currently at risk. The outstanding amount represents the guaranteed amount utilized under the related loans, which have been disbursed as of the end of a reporting period, exclusive of the standby portion. ADB estimates that the present value of guarantees outstanding at 31 December 2008 was $1,130,777,000 ($965,849,000 2007). As of 31 December 2008, a total liability of $23,257,000 ($13,668,000 2007) relating to stand-by ready obligation for seven partial credit risk guarantees (five 2007) and two political risk guarantees (two 2007) has been included in Miscellaneous liabilities on the balance sheet for all guarantees issued after 31 December 2002. NOTE GEQUITY INVESTMENTS ADB's investments in equity securities issued by private enterprises located in DMCs include $208,071,000 ($212,463,000 2007) investments in limited liability
partnership and limited liability companies. Such equity investments are accounted for under the equity method. As of 31 December 2008, there were six (six 2007) equity investments which were reported at fair value totaling $238,497,000 ($462,115,000 2007). One investment (nil 2007) sustained unrealized losses of $106,816,000 as of year end of 2008. Accumulated net unrealized gains on equity investments reported at market value were $116,895,000 at 31 December 2008 ($340,958,000 2007) and were reported in CAPITAL AND RESERVES as part of Accumulated other comprehensive income. Approved equity investment facility that has not been disbursed was $275,740,000 at 31 December 2008 ($344,046,000 2007). NOTE HDERIVATIVE INSTRUMENTS The fair value of outstanding currency and interest rate swap agreements is determined at the estimated amount that ADB would receive or pay to terminate the agreements using market-based valuation models. The basis of valuation is the present value of expected cash flows based on observable market data.
Annual Report 2008
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OCR-8
31 December 2007 and 2006 Interest rate swaps: Under a typical interest rate swap agreement, one party agrees to make periodic payments based on a notional principal amount and an interest rate that is fixed at the outset of the agreement. The counterparty agrees to make floating rate payments based on the same notional principal amount. The terms of ADB's interest rate swap agreements usually match the terms of particular borrowings. Currency swaps: Under a typical currency swap agreement, one party agrees to make periodic payments in one currency while the counterparty agrees to make periodic payments in another currency. The payments may be fixed at the outset of the agreement or vary based on interest rates. A receivable is created for the currency swapped out, and a payable is created for the currency swapped in. The terms of ADB's currency swap agreements usually match the terms of particular borrowings. Included in Receivable/Payable from Swaps-Others are interest rate and currency swaps that ADB has entered into for the purpose of hedging specific investments and loans. The loan related swaps were executed to better align the composition of certain outstanding loans with funding sources. NOTE IPROPERTY, FURNITURE, AND EQUIPMENT In 1991, under the terms of an agreement with the Philippines (Government), ADB returned the former headquarters premises, which had been provided by the Government. In accordance with the agreement as supplemented by a memorandum of understanding, ADB was compensated $22,657,000 for the return of these premises. The compensation is in lieu of being provided premises under the agreement and accordingly, is deferred and amortized over the estimated life of the new headquarters building as a reduction of occupancy expense. The amortization for the year ended 31 December 2008 amounted to $386,000 ($387,000 2007) reducing depreciation expense for the new headquarters building from $4,427,000 ($4,471,000 2007) to $4,041,000 ($4,084,000 2007). At 31 December 2008, the unamortized deferred compensation balance (included in ACCOUNTS PAYABLE AND OTHER LIABILITIES - Miscellaneous) was $8,218,000 ($9,529,000 2007). At 31 December 2008 accumulated depreciation for property, furniture, and equipment was $158,259,000 ($147,999,000 2007). NOTE JBORROWINGS
CONTINUED
The key objective of ADBs borrowing strategy is to raise funds at the lowest possible cost for the benefit of its borrowers. ADB uses financial derivative instruments in connection with its borrowing activities to increase cost efficiency, while achieving risk management objectives. Currency swaps enable ADB to raise operationally needed currencies in a cost-efficient way and to maintain its borrowing presence in the major capital markets. Interest rate swaps are used generally to reduce interest rate mismatches arising from lending operations. NOTE KCAPITAL STOCK, CAPITAL TRANSFERRED TO ASIAN DEVELOPMENT FUND, MAINTENANCE OF VALUE OF CURRENCY HOLDINGS, AND MEMBERSHIP Capital Stock The authorized capital stock of ADB as of the end of 2008 and 2007 consists of 3,546,311 shares, all of which have been subscribed by members. Of the subscribed shares, 3,296,887 are callable and 249,424 are paid-in. The callable share capital is subject to call by ADB only as and when required to meet ADB's obligations incurred on borrowings of funds for inclusion in its Ordinary Capital Resources (OCR) or on guarantees chargeable to such resources. The paid-in share capital has been paid or is payable in installments, partly in convertible currencies and partly in the currency of the subscribing member which may be convertible. In accordance with Article 6, paragraph 3 of the Charter, ADB accepts non-negotiable, non-interest-bearing demand obligations in satisfaction of the portion payable in the currency of the member, provided such currency is not required by ADB for the conduct of its operations. The settlement of such amounts is not determinable and, accordingly, it is not practicable to determine a fair value for these receivables. As of 31 December 2008, all matured installments amounting to $3,850,762,000 ($3,917,444,000 - 2007) were received. Installments not due aggregating $9,848,000 ($19,664,000 - 2007) are as follows: For the Year ending 31 December:
2009 $6,563,000 2010 $3,285,000
60

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 Capital Transferred to Asian Development Fund Pursuant to the provisions of Article 19, paragraph 1(i) of the Charter, the Board of Governors has authorized the setting aside of 10% of the unimpaired paid-in capital paid by members pursuant to Article 6, paragraph 2(a) of the Charter and of the convertible currency portion paid by members pursuant to Article 6, paragraph 2(b) of the Charter as of 28 April 1973 to be used as a part of the Special Funds of ADB. The resources so set aside amounting to $73,691,000 as of 31 December 2008 ($75,151,000 - 2007) expressed in terms of the SDR on the basis of $1.54781 ($1.57848 - 2007) per SDR ($57,434,000 in terms of $1.20635 per 1966 dollarNote B), were allocated and transferred to the Asian Development Fund. Maintenance of Value of Currency Holdings Ordinary Reserve and Net Income Prior to 1 April 1978, the effective date of the Second Amendment to the IMF Articles, ADB implemented maintenance of value (MOV) in respect of holdings of member currencies in terms of 1966 dollars, in accordance with the provisions of Article 25 of the Charter and relevant resolutions of the Board of Directors. Since then, settlement of MOV has been put in abeyance. In as much as the valuation of ADB's capital stock and the basis of determining possible MOV obligations are still under consideration, notional amounts have been calculated provisionally as receivable from or payable to members in order to maintain the value of currency holdings in terms of the SDR. In view thereof, the notional MOV amounts of receivables and payables are offset against one another and shown as net notional amounts to maintain value of currency holdings in the CAPITAL AND RESERVES portion of the Balance Sheet. The carrying book value for such receivables and payables approximates its fair value. The net notional amounts as of 31 December 2008 consisted of (a) the increase of $740,985,000 ($806,160,000 2007) in amounts required to maintain the value of currency holdings to the extent of matured and paid capital subscriptions due to the increase in the value of the SDR in relation to the United States dollar during the period from 1 April 1978 to 31 December 2008 and (b) the net increase of $176,602,000 ($144,963,000 - 2007) in the value of such currency holdings in relation to the United States dollar during the same period. In Under the provisions of Article 40 of the Charter, the Board of Governors shall determine annually what part of the net income shall be allocated, after making provision for reserves, to surplus and what part, if any, shall be distributed to the members. In May 2008, the Board of Governors approved the allocation of 2007 net income of $760,174,000 to Cumulative Revaluation Adjustments account for $87,623,000, to Loan Loss Reserve for $12,962,000, to Surplus and Ordinary Reserve for $278,294,000 each, to Technical Assistance Special Fund for $23,000,000, and to Asian Development Fund (ADF) and Climate Change Fund for $40,000,000 each. In 2007, the 2006 net income of $565,886,000 and additions from Cumulative Revaluation Adjustments account of $138,479,000 were allocated to Loan Loss Reserve for 52,000,000, to Surplus and Ordinary Reserve for $286,183,000 each, and to ADF and Regional Cooperation and Integration Fund for $40,000,000 each. The restatement of the capital stock for purposes of these financial statements on the basis of the SDR instead of the 1966 dollar (Note B) resulted in a net credit of $8,860,000 to the Ordinary Reserve during the year ended 31 December 2008 (net charge of $34,587,000 2007). That credit is the decrease in the value of the matured and paid capital subscriptions caused by the change during the year in the value of the SDR in relation to the United States dollar not allocated to members as terms of receivable from and payable to members, they are as follows:
2008 Notional MOV Receivables Notional MOV Payables Total $957,549,000 393,166,000 $564,383,000 2007 $853,546,000 192,349,000 $661,197,000
Membership As of 31 December 2008, ADBs shareholders consist of 67 member countries, 48 countries from the region and 19 countries from outside the region (OCR7). NOTE LRESERVES
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61
OCR-8
31 December 2007 and 2006 notional maintenance of value adjustments in accordance with resolutions of the Board of Directors. Cumulative Revaluation Adjustments Account In May 2002, the Board of Governors approved the allocation of net income representing the cumulative net unrealized gains (losses) on derivatives, as required by FAS 133 to a separate category of Reserves - Cumulative Revaluation Adjustments Account. Beginning 2008, the unrealized portion of net income from equity investments accounted under equity method is also transferred to this account. During the year, the 2007 net unrealized gains on derivatives of $57,508,000 and on income from equity investments accounted under equity method of $30,115,000 reduced the credit balance of the Cumulative Revaluation Adjustments account at 31 December 2008 to $23,336,000 ($110,959,000 2007). Special Reserve The Special Reserve includes commissions on loans and guarantee fees on guarantees set aside pursuant to Article 17 of the Charter. Special Reserve assets consist of term deposits and government and government-guaranteed obligations and are included under the heading INVESTMENTS. For the year ended 31 December 2008, guarantee fees amounting to $6,876,000 ($5,049,000 2007) were appropriated to Special Reserve. Loan Loss Reserve In 2004, the Board of Directors approved the creation of Loan Loss Reserve through an allocation of $218,800,000 out of prior year net income. The Loan Loss Reserve forms part of Capital and Reserves to be used as a basis for capital adequacy against the estimated expected loss in ADBs sovereign loans and guarantees portfolio. In December 2006, the Board of Directors approved the adoption of this policy to nonsovereign credit exposures. In 2008, the estimated loan loss reserve requirement was $195,062,000 resulting to an increase of $12,962,000. The estimated expected loss is determined using ADBs credit risk model net of loan loss provisions taken up in accordance with generally accepted accounting principles. Surplus
CONTINUED
Surplus represents funds for future use to be determined by the Board of Governors. In the first half of 2008, the Board of Governors approved the allocation of $278,294,000 out of 2007 net income to Surplus ($286,183,000 2007). Comprehensive Income Comprehensive income has two major components: net income and other comprehensive income comprising gains and losses affecting equity that, under accounting principles generally accepted in the United States of America, are excluded from net income. Other comprehensive income includes such items as the effects of the implementation of FAS 133, unrealized gains and losses on available-for-sale securities and listed equity investments, currency translation adjustments, and pension and post-retirement liability adjustment. NOTE MINCOME AND EXPENSES Total income from loans for the year ended 31 December 2008 was $1,358,506,000 ($1,446,318,000 2007). The average yield on the loan portfolio during the year was 3.84% (5.00% - 2007), excluding premium received on prepayment and other loan income. Premium on prepaid loans during 2008 amounted to $3,915,000 ($232,000 2007). Total income from investments including net realized losses on sales, net unrealized losses on derivatives, and interest earned for securities transferred under repurchase agreements and resale arrangements for the year ended 31 December 2008 was $564,059,000 ($676,230,000 2007). The annualized rate of return on the average investments held during the year, based on the portfolio held at the beginning and end of each month, was 3.20% (4.68% 2007) excluding unrealized gains and losses on investments and 4.63% (5.79% 2007) including unrealized gains and losses on investments. Including net realized losses, equity investment operations resulted to a net loss of $147,000 ($80,690,000 income 2007) for the year ended 31 December 2008. This included a total of $12,160,000 share in the net losses of investee companies accounted under equity method and $8,688,000 impairment losses mostly associated with restructured accounts, offset by dividend income,
62

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 gains on disposals, and other income of $15,823,000, $4,804,000, and $75,000 respectively. Income from other sources primarily included income received as executing agency amounting to $9,979,000 ($9,843,000 2007), interests earned on bank accounts and on staff accounts totaling $1,369,000 ($645,000 2007) and $1,682,000 ($2,265,000 2007), respectively, and reversals of expenses charged to prior years of $4,335,000 ($4,719,000 2007). Total interest expense incurred for the year ended 31 December 2008 amounted to $1,181,410,000 ($1,368,177,000 2007). Other borrowings and related expenses consisted of amortization of borrowings issuance costs and other expenses of $26,981,000 ($21,601,000 2007). Administrative expenses (other than those pertaining directly to ordinary operations and special operations) for the year ended 31 December 2008 were apportioned between OCR and ADF in proportion of the relative volume of operational activities of each fund. Of the total administrative expenses of $363,724,000 ($347,803,000 2007), $187,138,000 ($186,396,000 2007) was accordingly charged to ADF. The balance of administrative expenses after allocation was reduced by the deferral of direct loan origination costs of $35,539,000 ($34,080,000 2007) related to new loans that became effective for the year ended 31 December 2008 (Notes B and E). In November 2008, following the approval by the Board of Directors in September 2007, ADB entered into a Trust fund Grant Arrangement with International Bank for Reconstruction and Development and International Development Association, to provide $10,000,000 as a contribution to the Java Reconstruction Fund. This was charged to OCR current income as TECHNICAL ASSISTANCE TO MEMBER COUNTRIES. Net of write-back for the year totaling $1,643,000 ($683,000 2007) representing cancellations of the undisbursed amounts of completed TA projects committed in prior periods, technical assistance for the year amounted to $8,357,000. As of 31 December 2008, the net cumulative amount of TA commitments that had been charged to OCR net income amounted to $76,205,000 ($67,848,000 31 December 2007) out of which $65,716,000 ($65,530,000 2007) had been disbursed. For the year ended 31 December 2008, total writeback of provision for losses amounted to $3,467,000 ($579,000 - 2007). This corresponded to $1,333,000 for two sovereign loans and $2,134,000 for a nonsovereign loan, resulting mainly from repayments and loan restructuring. Other expenses of $6,271,000 ($3,998,000 2007) included non-borrowings related financial expenses such as fees paid to external asset managers and bank charges. Net unrealized gains incorporated $429,000 net losses ($3,680,000 2007) from the translation adjustments of financial instruments denominated in non-functional currencies (South African Rand and Mexican Peso), and net unrealized gains on derivatives of $451,020,000 ($57,508,000 2007), which were made up of:
2008 Unrealized gains (losses) on: Hybrid financial instruments and related swaps* Non-hybrid financial instruments and related swaps* Investments related swaps Loan related swaps FX Forward Amortization of the FAS 133 transition adjustment Total 2007
$387,136,000
$ (5,322,000)
249,942,000 (88,279,000) (98,625,000) 263,000 583,000 $451,020,000
108,028,000 (4,182,000) (38,089,000) (1,958,000) (969,000) $ 57,508,000
*Figures are not comparable due to the adoption of FAS 157 and 159 effective 1 January 2008, where (a) credit risk (spread) were incorporated in fair valuing the outstanding financial instruments, and (b) non-hybrid swapped borrowings which were recorded at amortized cost in 2007, were recorded at fair value in 2008.
NOTE NOTHER ASSETS AND LIABILITIES MISCELLANEOUS At 31 December 2008 and 2007, ADB had the following receivables from/payables to special funds and trust funds resulting from administrative arrangements and operating activities:
Annual Report 2008
63
OCR-8
CONTINUED Participants hired on or before 30 September 2006 are required to contribute 9 1/3% of their salary to the Plan while those hired after that date do not anymore contribute to the plan. Participants may also make additional voluntary contributions. ADB's contribution is determined at a rate sufficient to cover that part of the costs of the Plan not covered by the participants' contributions. Expected Contributions The expected amount of contributions to the Plan for 2009 amounts to $51,499,000 ($43,291,000 2007) representing ADBs contributions of $29,394,000 ($22,902,000 2007), based on budgeted contribution rate of 19% (16% - 2007), participants mandatory contributions of $11,605,000 ($11,889,000 2007) and discretionary contributions of $10,500,000 ($8,500,000 2007). Investment Strategy Contributions in excess of current benefits payments are invested in international financial markets and in a variety of investment vehicles. The Plan employs nine external asset managers and one global custodian who function within the guidelines established by the Plans Investment Committee. The investment of these assets, over the long term, is expected to produce higher returns than short-term investments. The investment policy incorporates the Plans package of desired investment return and tolerance for risk, taking into account the nature and duration of the Plans liabilities. The Plans assets are diversified among different markets and different asset classes. The use of derivatives for speculation, leverage or taking risks is prohibited. Selected derivatives are used for hedging and transactional efficiency purposes. The Plans investment policy is periodically reviewed and revised to reflect the best interest of the Plans participants and beneficiaries. The current policy, adopted in January 2003, specifies an asset-mix structure of 70% of assets in equities and 30% in fixed income securities. At present, investments of the Plans assets are divided into three categories: US equity, Non-US equity, and US fixed income.
2008 Amounts receivable from: Asian Development Fund (Note M) Technical Assistance Special Fund Japan Special Fund Asian Tsunami Fund Pakistan Earthquake Fund Regional Cooperation and Integration Fund Climate Change Fund Asian Development Bank Institute Special Fund Staff Retirement Plan Agency Trust Funds (net) Total Amounts payable to: Technical Assistance Special Fund Staff Retirement Plan Total $ 12,000 14,205,000 $ $31,743,000 145,000 669,000 4,000 15,000 6,000 847,000 842,000 $34,271,000
2007
$28,750,000 14,000 159,000 343,000 5,000 341,000 11,012,000 1,984,000 $42,608,000
$14,217,000
NOTE OSTAFF RETIREMENT PLAN AND POSTRETIREMENT MEDICAL BENEFITS Staff Retirement Plan ADB has a contributory defined benefit Staff Retirement Plan (the Plan). Every employee, as defined under the Plan, shall, as a condition of service, become a participant from the first day of service, provided that at such a date, the employee has not reached the normal retirement age of 60. The Plan applies also to members of the Board of Directors who elect to join the Plan. Retirement benefits are based on length of service and highest average remuneration during two years of eligible service. The Plan assets are segregated and are not included in the accompanying Balance Sheet. The costs of administering the Plan are absorbed by ADB, except for fees paid to the investment managers and related charges, including custodian fees, which are borne by the Plan.
64

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 As of 31 December 2008 and 2007, the breakdown of the fair value of plan assets held are as follows: hedge currency exposure in the investment portfolio, which are reported at fair value. For the year ended 31 December 2008 the net return on the Plan assets was -29.5% (6.0% 2007). ADB expects the long-term rate of return on the assets to be 8%. Assumptions
$ 320,303,000 215,489,000 535,792,000 362,584,000 16,254,000 $ 914,630,000 58.6% 39.6 1.8 100.0%
2008 Amount Equity Securities US Non-US Percentage
Fixed Income Securities Other Assets (Liabilities) net Total
2007 Amount Equity Securities US Non-US Percentage
The assumed overall rate of return takes into account long-term return expectations of the underlying asset classes within the investment portfolio mix, and the expected duration of the Plans liabilities. Return expectations are forward looking and, in general, not much weight is given to short-term experience. Unless there is a drastic change in investment policy or market environment, the assumed investment return of 8% on the Plans assets is expected to remain broadly the same, year to year. Postretirement Medical Benefits Plan In 1993, ADB adopted a cost-sharing plan for retirees medical insurance premiums. Under the plan, ADB is obligated to pay 75% of the Group Medical Insurance Plan premiums for retirees, including retired members of the Board of Directors, and their eligible dependents who elected to participate. The cost-sharing plan is currently unfunded. Generally accepted accounting principles require an actuarially determined assessment of the periodic cost of postretirement medical benefits. The following table sets forth the pension and postretirement medical benefits at 31 December 2008 and 2007:
$ 541,837,000 407,222,000 949,059,000 362,646,000 (10,150,000) $1,301,555,000 72.9% 27.9 (0.8) 100.0%
Fixed Income Securities Other Assets (Liabilities) net Total
All investments excluding time deposits are valued using market prices. Time deposits are reported at cost which is a reasonable estimate of fair value. Fixed income securities include US government and government guaranteed obligations, corporate bonds and time deposits. Other assets include forward exchange contracts in various foreign currencies transacted to
Annual Report 2008
65
OCR-8
CONTINUED
Pension Benefits 2008 Change in projected benefit obligation: Projected benefit obligation at beginning of year Service cost Interest cost Plan participants contributions Transfers Actuarial (gain) loss Amendments Benefits paid Projected benefit obligation at end of year Change in plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Employers contribution Plan participants contributions Transfers Benefits paid Fair value of plan assets at end of year Funded status Amounts recognized in the Balance sheet consist of: Current liabilities Noncurrent liabilities Net amount recognized Amounts recognized in the Accumulated other comprehensive income consist of: Net actuarial loss (gain) Prior service cost (credit) Total amount recognized Weighted-average assumptions as of 31 December Discount rate Expected return on plan assets Rate of compensation increase varies with age and averages 2007
Postretirement Medical Benefits 2008 2007
$1,476,832,000 38,077,000 89,682,000 30,831,000 (163,591,000) (75,032,000) $1,396,799,000
$1,336,833,000 38,564,000 81,558,000 27,186,000 (232,000) 59,287,000 (66,364,000) $1,476,832,000
$ 193,008,000 8,432,000 11,969,000 (57,563,000) (2,715,000) $ 153,131,000
$ 187,030,000 8,823,000 11,634,000 (11,952,000) (2,527,000) $ 193,008,000
$1,301,555,000 (381,940,000) 39,216,000 30,831,000 (75,032,000) $ 914,630,000 $ (482,169,000)
$1,235,346,000 73,905,000 31,714,000 27,186,000 (232,000) (66,364,000) 1,301,555,000 $ (175,277,000)
2,715,000 (2,715,000)
2,527,000 (2,527,000)
$ (153,131,000)
$(193,008,000)
(482,169,000) $ (482,169,000)
(175,277,000) $ (175,277,000)
(4,183,000) (148,948,000) $ (153,131,000)
(3,907,000) (189,101,000) $(193,008,000)
$ 425,385,000 11,833,000 $ 437,218,000
$ 110,605,000 15,912,000 $ 126,517,000
$ (15,660,000) (20,002,000) $ (35,662,000)
$ 43,853,000 (28,648,000) $ 15,205,000
7.25% 8.00% 5.05%
6.00% 8.00% 4.65%
7.25% N/A 5.05%
6.00% N/A 4.65%
For measurement purposes, a 9.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for the valuation as at 31 December
2008. The rate was assumed to decrease gradually to 5.0% for 2013 and remain at the level thereafter.
66

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007
Pension Benefits 2008 Components of net periodic benefit cost: Service cost Interest cost Expected return on plan assets Amortization of prior service cost Recognized actuarial loss Net periodic benefit cost $38,077,000 89,682,000 (98,293,000) 4,079,000 1,862,000 $35,407,000 $38,564,000 81,558,000 (88,047,000) 4,079,000 2,569,000 $38,723,000 $ 8,432,000 11,969,000 (8,646,000) 1,950,000 $13,705,000 $ 8,823,000 11,634,000 (8,646,000) 3,304,000 $15,115,000 2007 Postretirement Medical Benefits 2008 2007
The accumulated benefit obligation of the pension plan as of 31 December 2008 was $1,306,323,000 ($1,374,738,000 2007). The estimated net loss and prior service cost for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are US$8,940,000 and US$4,079,000, respectively. The estimated net loss and prior service credit for the other postretirement benefits plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is US$(27,000) and US$(8,646,000), respectively. A one-percentage-point change in assumed health care trend rates would have the following effects:
1-PercentagePoint Increase Effect on total service and interest cost components Effect on postretirement benefit obligation $ 5,234,000 27,449,000 1-PercentagePoint Decrease $ (3,953,000) (21,903,000)
NOTE PFAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts and estimated fair values of ADB's significant financial instruments as of 31 December 2008 and 2007 are summarized in the next page. The Fair Value Option Effective 1 January 2008, ADB elected the Fair Value Option on all borrowings with associated derivative instruments. This election allows ADB to mitigate the earnings volatility in its statutory reporting that is caused by the different accounting treatment of the borrowing and its related derivative without having to apply the complex hedge accounting requirements of FAS 133. Fair Value Measurement FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability at measurement date (exit price) in an orderly transaction among willing participants with an assumption that the transaction takes place in the entitys principal market, the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The fair value measurement is not adjusted for transaction cost. ADB determines fair values using inputs based on quoted or observable market prices and cash flow models. Inputs for the models are based on observable market data such as yield curves, interest rates, volatilities, and foreign exchange rates. Parameters and models used for valuation are subject to internal review and periodic external validation.
Estimated Future Benefits Payments The following table shows the benefit payments expected to be paid in each of the next five years and subsequent five years. The expected benefit payments are based on the same assumptions used to measure the benefit obligation at 31 December 2008:
Pension Benefits 2009 2010 2011 2012 2013 2014-2018 $ 68,830,000 66,041,000 71,501,000 76,081,000 78,628,000 460,645,000 Postretirement Medical Benefits $ 4,183,000 4,802,000 5,475,000 6,137,000 6,780,000 43,674,000
Annual Report 2008
67
OCR-8

2008 Carrying Amounta On-balance sheet financial instruments: ASSETS: Due from banks Investments (Note D) Securities transferred under repurchase agreement Securities purchased under resale arrangement Loans outstanding (Note E) Equity investments (Note G) Other assets Non-negotiable, non-interest-bearing demand obligations Receivable from swaps others (Note H) Receivable from swaps borrowings (Note H) Future guarantee receivable LIABILITIES: Borrowings (Note J) Other liabilities Payable for swaps others (Note H) Payable for swaps borrowings (Note H) Guarantee liability 36,026,446,000 1,198,781,000 24,867,815,000 23,257,000 2008 Outstanding Amount Off-balance sheet financial instruments: Guarantees (Note F) $ 1,189,851,000 $ Present Value 769,204,000 Outstanding Amount $ 1,060,328,000 37,848,839,000 1,198,781,000 24,867,815,000 23,257,000 31,959,299,000 583,321,000 16,936,964,000 13,668,000 2007 $ 142,238,000 15,412,519,000 309,358,000 511,756,000 35,910,060,000 641,427,000 144,514,000 882,793,000 23,831,087,000 23,257,000 $ 142,238,000 15,412,519,000 309,358,000 511,756,000 37,830,959,000 641,427,000 93,724,000 882,793,000 23,831,087,000 23,257,000 $ 108,821,000 13,296,943,000 5,041,387,000 427,132,000 30,282,879,000 808,157,000 174,805,000 512,089,000 17,968,867,000 13,668,000 Estimated Fair Value Carrying Amounta 2007
CONTINUED
Estimated Fair Value
$ 108,821,000 13,296,943,000 5,041,387,000 427,132,000 31,461,370,000 808,157,000 105,027,000 512,089,000 17,968,867,000 13,668,000
32,023,669,000 583,321,000 16,936,964,000 13,668,000
Present Value $ 689,145,000
a The carrying amount for borrowings and swaps are inclusive of accrued interest.
Following guidelines are applied in determining the fair values of financial instruments: Borrowings and associated derivative instruments. Structured borrowings issued by ADB are valued by using the discounted cash flow models based on embedded options such as caps, floors, calls, and credit spread. These models use pay-off profiles within the realm of accepted market practices such as Hull-White, Black and Scholes, Libor Market Model as applicable. Non-structured swapped borrowings, forward foreign exchange, interest rate, and cross currency swap contracts are fair valued with observable market inputs using discounted cash flow models. Market observable inputs, such as yield curves, foreign exchange rates, basis spreads, credit spreads, cross currency rates, and volatilities are applied to the models to determine fair value of borrowings. Classified under Level 2 are swapped borrowings and the related derivatives for which ADB can obtain observable market inputs in the form of primary broker quotes for
similar debt instruments. Included in Level 3 category are swapped borrowings fair-valued using significant unobservable inputs. Investments, asset swaps, repurchase agreements and resale arrangements. Readily marketable investments are fair valued using active market quotes in Level 1 category. Level 2 category includes investments and repurchase agreements fair valued with significant other market observable inputs. Included in Level 3 category are insignificant portfolio of investments fair valued using significant unobservable inputs including prices provided by third parties such as the custodians and asset managers. Forward foreign exchange, interest rate, and cross currency swap contracts are fair valued with observable market inputs using discounted cash flow models. Market observable inputs, such as yield curves, foreign exchange rates, basis spreads, credit spreads, cross currency rates, and volatilities are applied to the models to determine fair value of investments.
68

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 Equity Investments. Readily marketable equity investments are fair valued using quoted prices in active markets. Fair Value Hierarchy FAS 157 establishes a fair value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3). FAS 157 requires the fair value measurement to maximize the use of market observable inputs. Assets and liabilities measured at fair value on a recurring basis: The fair value of the following financial assets and liabilities as of 31 December 2008 were reported based on the following:
Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
31 December 2008 Assets Investments Securities transferred under repurchase agreement Securities purchased under resale arrangement Investments related swaps Loans related swaps Borrowings related swaps Equity investments Total Liabilities Borrowings Borrowings related swaps Investments related swaps Loans related swaps Total $31,012,976,000 24,867,815,000 745,289,000 453,492,000 $57,079,572,000 $15,412,519,000 309,358,000 511,756,000 544,796,000 337,997,000 23,831,087,000 238,497,000 $41,186,010,000
$6,410,116,000 309,358,000 238,497,000 $6,957,971,000
$ 8,978,004,000 511,756,000 544,796,000 337,997,000 23,831,087,000 $34,203,640,000
24,399,000
24,399,000
$24,528,881,000 24,867,815,000 745,289,000 453,492,000 $50,595,477,000
$6,484,095,000 $6,484,095,000
Assets (liabilities) measured at fair value on a recurring basis using significant unobservable inputs (level 3):
Investments Balance, 1 January 2008 Total gains (losses) (realized/unrealized) Included in earnings Included in other comprehensive income Purchases, sales, and paydowns Issuances, redemptions, and maturities Transfers out of Level 3 Balance, 31 December 2008 The amount of net losses for the period included in earnings attributable to the change in net unrealized gains relating to assets/liabilities still held at the reporting date $127,442,000 52,000 (8,652,000) 1,262,000 (95,705,000) $ 24,399,000 Borrowings $(5,034,939,000) 384,233,000 550,965,000 (2,384,354,000) $(6,484,095,000)
282,466,000
Annual Report 2008
69
OCR-8
31 December 2007 and 2006 The following table provides the effect of the initial adoption of FAS 157 and FAS 159.
Carrying value 1 January 2008, prior to adoption Borrowings Cumulative effect to 1 January 2008 balance of reserves $31,959,300,000
CONTINUED
Net gain upon adoption $(227,500,000) $227,500,000
Carrying value 1 January 2008, after adoption $31,731,800,000
The fair value of borrowings for which the fair value option has been elected exceeds the aggregate principal balance by $1,541,598,000. The estimated gain from fair value changes included in earnings that are attributable to the widening of the credit spreads was $531,665,000 for the year ended 31 December 2008. Changes in fair value resulting from changes in instrument-specific credit risk were estimated by incorporating ADB's current observable credit spread by currency into the relevant valuation technique used to value the borrowing instruments. The related interest expense continues to be measured based on the contractual interest rates and reported as such in the Statement of Income and Expenses. NOTE QCREDIT RISK ADB is exposed to risk if the borrowers fall in arrears on payments. ADB manages country risk for lending operations through continuous monitoring of creditworthiness of the borrowers and rigorous capital adequacy framework. Guarantees involve elements of credit risk which are also not reflected on the balance sheet. Credit risk represents the potential loss due to possible nonperformance by obligors and counterparties under the terms of the contract. As of 31 December 2008, ADB has a significant concentration of credit risk to Asian and the Pacific region associated with loan and guarantee products with credit exposure determined based on fair value of loans and outstanding guarantees amounting to $39,446,560,000 ($32,857,877,000 2007). ADB undertakes derivative transactions with its eligible counterparties and transacts in various financial instruments as part of liquidity and asset/liability management purposes that may involve credit risks.
For all investment securities and their derivatives, ADB manages credit risks by following the guidelines set forth in the Investment Authority (Note D). ADB has a potential risk of loss if the swap counterparty fails to perform its obligations. In order to reduce such credit risk, ADB only enters into long-term swap transactions with counterparties eligible under ADB's swap guidelines which include a requirement that the counterparties have a credit rating of A-/A3 or higher and requires certain counterparties with executed Credit Support Annex, to provide collateral in form of cash or other approved liquid securities based on markto-market exposure. As of 31 December 2008, ADB had received collateral of $418,995,000 ($461,017,000 2007) in connection with the swap agreements. ADB has also entered into master swap agreements which contain legally enforceable close-out netting provisions for all counterparties with outstanding swap transactions. NOTE RSPECIAL AND TRUST FUNDS ADB's operations include special operations, which are financed from special fund resources, consisting of the Asian Development Fund, the Technical Assistance Special Fund, Japan Special Fund, the Asian Development Bank Institute Special Fund, the Asian Tsunami Fund, the Pakistan Earthquake Fund, the Regional Cooperation and Integration Fund, and the Climate Change Fund. The OCR and special fund resources are at all times used, committed, and invested entirely separate from each other. The Board of Governors may approve allocation of the net income of OCR to special funds, based on the funding and operational requirements for the funds. The administrative and operational expenses pertaining to the OCR and special funds are charged to the respective special funds. The administrative
70
OCR-8

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 expenses of ADB are allocated amongst OCR and special funds and are settled on a regular basis between the OCR and the special funds. In addition, ADB, alone or jointly with donors, administers on behalf of the donors, including members of ADB, their agencies and other development institutions, projects/programs supplementing ADB's operations. Such projects/programs are funded with external funds administered by ADB and with external funds not under ADB's administration. ADB charges administrative fees for external funds administered by ADB. The funds are restricted for specific uses including technical assistance to borrowers and technical assistance for regional programs. The responsibilities of ADB under these arrangements range from project processing to project implementation including the facilitation of procurement of goods and services. These funds are held in trust with ADB, and are held in a separate investment portfolio, which is not commingled with ADBs funds, nor are they included in the assets of ADB. Special funds and funds administered by ADB on behalf of the donors are not included in the assets of OCR. The breakdown of the total of such funds together with the funds of the special operations as of 31 December 2008 and 2007 is as follows:
2008 Total Net Assets Special Funds Asian Development Fund Technical Assistance Special Fund Japan Special Fund Asian Development Bank Institute Special Fund Asian Tsunami Fund Pakistan Earthquake Fund Regional Cooperation and Integration Fund Climate Change Fund Subtotal Trust Funds Funds administered by ADB Funds not administered by ADB Subtotal Total $33,479,348,000 102,707,000 142,116,000 15,723,000 46,387,000 2,203,000 24,588,000 37,427,000 33,850,499,000 No.of Funds 1 1 1 1 1 1 1 1 8
2007 Total Net Assets $31,949,604,000 193,119,000 171,558,000 18,292,000 40,008,000 (3,453,000) 33,817,000 32,402,945,000 No.of Funds 1 1 1 1 1 1 1
953,075,000 7,660,000 960,735,000 $34,811,234,000
66 2 68 76
1,130,226,000 7,337,000 1,137,563,000 $33,540,508,000
64 2 66 73
During the year ended 31 December 2008, a total of $9,573,000 ($9,310,000 2007) was recorded as compensation for administering projects/programs under Trust Funds. The amount has been included in Revenue from Other Sources - net. NOTE SVARIABLE INTEREST ENTITIES As of 31 December 2008, ADB did not identify any VIE in which ADB is the primary beneficiary, requiring consolidation in OCR financial statements. ADB may hold significant variable interests in VIE, which requires disclosures.
The review of ADBs loan, equity investments, and guarantee portfolio, has identified 2 (2 2007) investments in VIEs in which ADB is not the primary beneficiary, but in which it is reasonably possible that ADB could be deemed to hold significant variable interest. ADBs total committed investment in these entities, comprising disbursed and undisbursed balances, corresponded to the maximum exposure to loss totaling $143,700,000 as of 31 December 2008 ($109,200,000 2007). Based on the most recent available information from these VIEs, the assets of these VIEs totaled $422,912,000 ($376,785,000 2007).
Annual Report 2008
71
ASIAN DEVELOPMENT FUND

5 March 2009
72
In our opinion, the accompanying special purpose statements of assets, liabilities, fund balances and the related special purpose statements of revenues and expenses, cash flows and changes in fund balances present fairly, in all material respects, the financial position of Asian Development Bank (ADB or the Bank)Asian Development Fund at 31 December 2008 and 2007 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America, with the exception of loan loss provisioning which has been eliminated with the adoption of special purpose financial statements. Also in our opinion, managements assertion that ADB maintained effective internal control over financial reporting as of 31 December 2008 is fairly stated, in all material respects, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The management of ADB is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assertion of the effectiveness of internal control over financial reporting, included in the accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on ADBs internal control over financial reporting based on our integrated audit in 2008 and financial statement audit in 2007. We conducted our audits of the financial statements in accordance with auditing standards generally accepted in the United States of America and our audit of internal control over financial reporting in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Annual Report 2008
73
Our audits were conducted for the purpose of forming an opinion on the special purpose financial statements taken as a whole. The accompanying special purpose statements of loans as at 31 December 2008 and 2007, and of resources as at 31 December 2008 are presented for purposes of additional analyses and are not required parts of the special purpose financial statements. Such information has been subjected to the auditing procedures applied in the audits of the special purpose financial statements and in our opinion is fairly stated in all material respects in relation to the special purpose financial statements taken as a whole. A companys internal control over financial reporting is a process effected by those charged with governance, management, and other personnel, designed to provide reasonable assurance regarding the preparation of reliable financial statements in accordance with accounting principles generally accepted in the United States of America. A companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and those charged with governance; and (iii) provide reasonable assurance regarding prevention, or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
74
ADF-1
ASIAN DEVELOPMENT BANKASIAN DEVELOPMENT FUND

SPECIAL PURPOSE STATEMENT OF ASSETS, LIABILITIES, AND FUND BALANCES 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
2008 ASSETS DUE FROM BANKS (Note B) INVESTMENTS (Notes B, C, and L) Government and government-guaranteed obligations Time deposits Corporate bonds SECURITIES PURCHASED UNDER RESALE ARRANGEMENT (Notes B, C, and L) LOANS OUTSTANDING (ADF-5) (Notes B, D, L, and M) Sovereign Lessprovision for HIPC Debt Relief ACCRUED REVENUE On investments On loans DUE FROM CONTRIBUTORS (Notes B, E, and L) RECEIVABLE FROM FORWARD CONTRACTS OTHER ASSETS TOTAL LIABILITIES AND FUND BALANCES PAYABLE TO RELATED FUNDS (Notes F and H) ADVANCE PAYMENTS ON CONTRIBUTIONS (ADF-6) (Note B) UNDISBURSED COMMITMENTS (Notes B, K, and L) PAYABLE FOR FORWARD CONTRACTS OTHER LIABILITIES (Note G) TOTAL LIABILITIES FUND BALANCES Amounts available for operational commitments (ADF-6) Contributed Resources (Notes B and G) Unamortized Discount (ADF-6) (Note B) Set-Aside Resources (Note I) Transfers from Ordinary Capital Resources and Technical Assistance Special Fund (Note A) $ 31,743 124,473 1,052,333 373,041 478 1,582,068 26,427,289 87,471 56,659 56,045 $ 2,912,159 687,147 2,401,231 $ 7,974 $ 6,000,537 322,361
2007 $ 688,654 6,054,661 151,409 2,945
6,894,724 58,178
26,339,818
24,017,992 32,618 59,077
24,017,992
112,704 1,928,941 307,811 41,270 $35,061,416
91,695 1,678,404 36,495 $32,780,433
30,170 117,573 682,582 504 830,829
$31,089,051 (44,645) 31,044,406 73,691 743,823 31,861,920
$28,725,096 (46,711) 28,678,385 75,151 703,986 29,457,522 2,243,408 33,479,348 $35,061,416 248,674 31,949,604 $32,780,433
Accumulated surplus (ADF-4) Accumulated other comprehensive income (ADF-4) (Notes B and J) TOTAL
3,719,782 (2,102,354)
The accompanying notes are an integral part of these special purpose financial statements (ADF-7).
Annual Report 2008
75
ADF-2

SPECIAL PURPOSE STATEMENT OF REVENUE AND EXPENSES For the Years Ended 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
2008 REVENUE From loans (Notes B and D) From investments (Notes B and C) From other sourcesnet EXPENSES Grants (Notes B and K) Administrative expenses (Note H) Amortization of discounts on contributions (Notes B and G) Provision for HIPC Debt Relief (Notes D and M) Other expenses NET REALIZED GAINS From loans (Note B) From investments NET UNREALIZED (LOSSES) GAINS (Note B) REVENUE IN EXCESS OF (LESS THAN) EXPENSES
2007
250,568 258,880 1,066
$ 510,514
$ 218,761 317,579 1,277
$ 537,617
539,800 187,138 6,547 89,788 17
377,760 186,396 4,237 25
823,290
568,418
2,088,211 362
2,088,573 (299,423) $1,476,374
13,486 $ (17,315)
76
ADF-3

SPECIAL PURPOSE STATEMENT OF CASH FLOWS For the Years Ended 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
2008 CASH FLOWS FROM OPERATING ACTIVITIES Interest charges on loans received Interest on investments received Interest received from securities under resale arrangement Cash received from other sources Administrative expenses paid Grants disbursed Financial expenses paid Net Cash Provided by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Sales of investments Maturities of investments Purchases of investments Net payments for securities purchased under resale arrangement Net payments for forward contracts Principal collected on loans Loans disbursed Net Cash Used in Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Contributions received and encashed1 Cash received from Ordinary Capital Resources Net Cash Provided by Financing Activities Effect of Exchange Rate Changes on Due from Banks Net Increase in Due from Banks Due from Banks at Beginning of Year Due from Banks at End of Year RECONCILIATION OF REVENUE IN EXCESS OF (LESS THAN) EXPENSES TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Revenue in excess of (less than) expenses (ADF-2) Adjustments to reconcile revenue in excess of (less than) expenses to net cash provided by operating activities: Amortization of discounts/premiums on investments Amortization of discounts/premiums on forward contracts Amortization of discount under ANE Grants approved and effective Capitalized charges on loans Net loss on sales of investments Provision for HIPC debt relief Change in disbursed grants Change in advances under TA grants Change in accrued revenue on investments and loans Change in accrued expenses Change in other assets Translation adjustments Net Cash Provided by Operating Activities $ 1,476,374 (26,222) (3,089) 6,547 539,800 (27,421) (362) 89,788 (170,098) (7,333) (21,898) 2,993 (0) (1,788,787) $ 70,292 $ $ $ $ 228,544 201,334 939 1,066 (184,109) (177,466) (16) 70,292 362 132,364,873 (131,564,370) (247,866) (12,644) 676,889 (2,015,224) (797,980) 698,028 40,000 738,028 (5,311) 5,029 2,945 7,974 $ $
2007 185,569 302,569 2,022 1,247 (183,664) (62,804) (24) 244,915 135,378,128 (135,503,687) (3,863) 586,409 (1,592,955) (1,135,968) 847,961 40,000 887,961 3,435 343 2,602 2,945
(17,315) (18,570) 4,237 377,760 (24,675) (51,051) (11,801) (2,934) 2,780 (30) (13,486) 244,915
0 Less than $500. 1 Supplementary disclosure on noncash financing activities: Nonnegotiable, noninterest-bearing demand promissory notes amounting to $823,323 ($783,246 - 2007) were received from contributing members. The accompanying notes are an integral part of these special purpose financial statements (ADF-7).
Annual Report 2008
77
ADF-4

SPECIAL PURPOSE STATEMENT OF CHANGES IN FUND BALANCES For the Years Ended 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
Contributed Resources Balance - 1 January 2007 Comprehensive income for the year 2007 (Note J) Change in amounts available for operational commitments Contributed Resources Unamortized Discount Transfer from ordinary capital resources Change in SDR value of set-aside resources Change in value of transfers from Technical Assistance Special Fund Balance - 31 December 2007 Comprehensive income for the year 2008 (Note J) Change in amounts available for operational commitments Contributed Resources Unamortized Discount Transfer from ordinary capital resources Change in SDR value of set-aside resources Change in value of transfers from Technical Assistance Special Fund Balance - 31 December 2008 $25,963,646
Set-Aside Resources $71,624
Transfers from OCR & TASF $663,614
Accumulated Other Accumulated Comprehensive Surplus Income $2,260,723 (17,315) $287,863 (39,189)
Total $29,247,470 (56,504)
2,727,913 (13,174) 40,000 3,527 372 $28,678,385 $75,151 $703,986 $2,243,408 1,476,374 $248,674 (2,351,028)
2,727,913 (13,174) 40,000 3,527 372 $31,949,604 (874,654)
2,363,955 2,066 40,000 (1,460) (163) $31,044,406 $73,691 $743,823 $3,719,782 $(2,102,354)
2,363,955 2,066 40,000 (1,460) (163) $33,479,348
Accumulated Other Comprehensive Income (Note J) For the Years Ended 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
Accumulated Translation Adjustments 2008 Balance, 1 January Other comprehensive income for the year Balance, 31 December $ 241,638 (2,451,641) $(2,210,003) 2007 $ 288,700 (47,062) $ 241,638 $ Unrealized Investment Holding Gains (Losses) 2008 7,036 100,613 $107,649 $ 2007 (837) 7,873 $ 7,036 $ Accumulated Other Comprehensive Income 2008 248,674 (2,351,028) 2007 $287,863 (39,189)
$(2,102,354) $248,674
78

SPECIAL PURPOSE SUMMARY STATEMENT OF LOANS 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
Borrowers/Guarantors1 Afghanistan Armenia Azerbaijan Bangladesh Bhutan Cambodia Cook Islands Georgia Indonesia Kazakhstan Kiribati Kyrgyz Republic Lao PDR Maldives Marshall Islands Micronesia, Fed. States of Mongolia Myanmar Nepal Pakistan Papua New Guinea Philippines Samoa Solomon Islands Sri Lanka Tajikistan Thailand Tonga Tuvalu Uzbekistan Vanuatu Viet Nam Regional TOTAL 31 December 2008 Provision for HIPC Debt Relief NET BALANCE 31 December 2008 NET BALANCE 31 December 2007
1 2
Loans Outstanding $ 463,601 8,100 26,558 5,743,777 115,992 812,591 26,770 72,560 1,130,869 7,353 14,520 570,858 1,129,607 67,199 67,748 48,699 575,286 565,751 1,564,986 6,403,379 301,809 907,770 84,867 56,169 2,614,832 237,101 45,870 44,317 6,989 26,126 53,816 2,630,421 998 26,427,289 (87,471) $ 26,339,818 $ 24,017,992
Undisbursed Balances of Effective Loans2 $ 324,022 59,343 31,570 1,156,028 56,852 215,568 76 38,141 463,476 525 53,359 75,169 24,061 19,100 90,020 328,870 763,024 68,417 41,645 403,603 146,593 990 113,257 1,107,475 593 5,581,777 $ 5,581,777 $ 6,127,364 $
Loans Not Yet Effective2 17,337 84,850 29,148 7,002 80,500 7,078 230,229 104,146 2,647 61,996 45,504 330,708 1,001,145 $ 1,001,145 $ 1,048,872 $
Total Loans 787,623 84,780 58,128 6,984,655 201,992 1,028,159 33,848 110,701 1,674,845 7,878 14,520 624,217 1,204,776 98,338 67,748 67,799 665,306 565,751 1,893,856 7,396,632 474,372 907,770 129,159 56,169 3,080,431 383,694 45,870 44,317 7,979 184,887 53,816 4,068,604 1,591 33,010,211 (87,471) $ 32,922,740 $ 31,194,228
Percent of Total Loans 2.39 0.26 0.18 21.16 0.61 3.11 0.10 0.34 5.07 0.02 0.04 1.89 3.65 0.30 0.21 0.21 2.02 1.71 5.74 22.41 1.44 2.75 0.39 0.17 9.33 1.16 0.14 0.13 0.02 0.56 0.16 12.33 100.00
Loans other than those made directly to a member or to its central bank have been guaranteed by the member. Loans negotiated before 1 January 1983 were denominated in current United States dollars. Loans negotiated after that date are denominated in Special Drawing Rights (SDR) for the purpose of commitment. The undisbursed portions of such SDR loans are translated into United States dollars at the applicable exchange rates as of the end of a reporting period. Of the undisbursed balances, ADB has entered into irrevocable commitments to disburse various amounts totaling $27,601 ($49,996 - 2007).
Annual Report 2008
79
ADF-5
MATURITY OF EFFECTIVE LOANS
Twelve Months Ending 31 December 2009 2010 2011 2012 2013
Amount $ 1,135,914 945,246 1,059,334 1,136,702 1,214,380
Five Years Ending 31 December 2018 2023 2028 2033 2038 2043 2048 Total
Amount 7,094,027 7,272,100 5,751,782 4,000,091 1,805,918 436,212 157,360 $ 32,009,066
SUMMARY OF CURRENCIES RECEIVABLE ON LOANS OUTSTANDING Currency Australian dollar Canadian dollar Danish krone Euro Japanese yen Korean won Malaysian ringgit New Zealand dollar $ 2008 59,046 278,119 36,809 2,235,000 6,262,394 24,536 875 1,279 $ 2007 230,396 921,698 82,874 5,051,792 11,740,188 96,630 6,923 12,958 Currency Norwegian krone Pound sterling Singapore dollar Swedish krona Swiss franc Thai baht United States dollar Special Drawing Rights3 Total 2008 112,091 189,337 86 98,374 128,826 863 2,101,757 14,897,897 $26,427,289 2007 279,628 497,311 2,603 296,379 356,988 4,103 3,911,724 525,797 $24,017,992
Basket of currencies defined by the International Monetary Fund consisting of the Euro, Japanese yen, Pound sterling and US dollar.
80
ADF-6

SPECIAL PURPOSE STATEMENT OF RESOURCES 31 December 2008 Expressed in Thousands of United States Dollars (Note B)
Effective Amounts Committed During 2008 CONTRIBUTED RESOURCES Australia Austria Belgium Brunei Darussalam1 Canada China, Peoples Republic of Denmark Finland France Germany Hong Kong Indonesia Ireland Italy Japan Korea, Rep. of Luxembourg Malaysia Nauru The Netherlands New Zealand Norway Portugal Singapore Spain Sweden Switzerland Taipei,China Thailand Turkey United Kingdom United States Total SET-ASIDE RESOURCES $ 9,500 5,934 1,198 614 112,428 1,400 295 1,674 133,042 2
Effective Amounts Committed At Exchange Rates Per Resolutions At 31 December 2008 Exchange Rates
Amounts Not Yet Available For Operational Commitments
Amounts Available For Operational Commitments
Amounts Amounts Received Receivable
$ 1,528,867 196,897 181,749 9,500 1,581,659 28,004 211,781 132,515 1,096,317 1,479,254 54,459 14,960 28,046 916,215 8,602,366 267,256 38,328 14,667 1,933 587,468 113,174 200,475 65,994 7,734 295,384 338,996 288,698 63,475 9,470 110,520 1,051,133 3,767,249 23,284,544
$ 1,317,489 271,000 234,752 9,500 1,638,863 28,004 268,061 148,550 1,359,361 2,036,586 54,459 14,960 32,470 915,630 15,759,886 220,135 47,818 12,435 1,933 798,349 100,894 187,696 93,709 9,130 384,090 284,391 444,559 60,990 9,019 110,520 868,016 3,767,249 31,490,504 3 73,691 740,000
17,512 1,814 18,205 3,804 1,907 104,845 2,541 561 4,255 4,879 5,197 2,524 278,054 446,098 4
$ 1,317,489 253,488 232,938 9,500 1,620,657 28,004 264,257 146,644 1,359,361 1,931,741 54,459 14,960 32,470 915,630 15,759,886 217,594 47,818 12,435 1,933 798,349 100,334 183,440 93,709 9,130 379,211 279,194 444,559 60,990 9,019 107,996 868,016 3,489,195 31,044,406 5 73,691 740,000 3,823
$ 1,317,489 253,488 232,938 9,500 1,620,657 28,004 264,257 146,644 1,359,361 1,931,741 54,459 14,960 32,470 915,630 15,759,886 217,594 47,818 12,435 1,433 798,349 100,334 183,440 93,709 9,130 379,211 279,194 444,559 60,990 9,019 107,996 868,016 3,489,195 31,043,906 6 73,691 740,000 3,823
500 500 $500
TRANSFER FROM ORDINARY CAPITAL RESOURCES 40,000 TRANSFERS FROM TECHNICAL ASSISTANCE SPECIAL FUND7 TOTAL $23,284,544
3,823 $32,308,018
$173,042
$446,098
$31,861,920 $31,861,420
Note: Figures may not add due to rounding. 1 Became a member of ADB in June 2006, and have committed and fully paid its contribution to ADF IX in June 2008. 2 Except for Brunei and Italy, amounts committed during the year represents the discount due to the accelerated note encashment (ANE). 3 Represents amounts committed per Instrument of Contribution including discount on donors contributions due to the ANE for ADF IX totaling $56,758. 4 Includes the balance of unamortized discount on donors contributions due to the ANE for ADF IX totaling $44,645. 5 Includes the amortized discount on donors contributions due to the ANE for ADF IX totaling $12,113 and the foregone interest received. 6 Excludes advance payments received from donors totaling $124,473, which have not been made available for operational commitments as of 31 December 2008. 7 Includes translation adjustments amounting to $352 as of 31 December 2008. The accompanying notes are an integral part of these special purpose financial statements (ADF-7).
Annual Report 2008
81
ADF-7

NOTES TO SPECIAL PURPOSE FINANCIAL STATEMENTS 31 December 2008 and 2007 NOTE ANATURE OF OPERATIONS The Asian Development Fund (ADF) was established on 28 June 1974 to more effectively carry out the special operations of the Asian Development Bank (ADB) by providing resources on concessional terms which are made available almost exclusively to the least developed borrowing countries. The resources of ADF have been subsequently augmented by eight replenishments, the most recent of which became effective in April 2005 consisting of $3,302,547,000 in contributions from donors and $3,700,000,000 from internal resources to cover the operational requirements for the four-year period from January 2005. Under this replenishment, ADB was authorized to provide financing in the form of grants for projects and programs of high developmental priority. In August 2008, the Board of Governors approved the resolution providing for the ninth replenishment of the Asian Development Fund (ADF X) and the fourth regularized replenishment of the Technical Assistance Special Fund (TASF). The resolution provides for a substantial replenishment of the ADF to finance ADBs concessional program for the four-year period from January 2009, and for a replenishment of the TASF in conjunction with the ADF replenishment, to finance technical assistance operations under the fund. Total replenishment size is SDR7,111,290,000, of which SDR2,641,290,000 will come from new donor contributions. Donors agreed to allocate 3% of the total replenishment size (equivalent to 8% of total donor contributions) to TASF. The replenishment shall be effective upon receipt of the Instruments of Contribution for Unqualified Contribution commitments in an aggregate amount equivalent to at least SDR1,320,645,000, and such date should not be later than 1 July 2009. NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In May 2001, the Board of Directors approved the adoption of the special purpose financial statements for ADF. Due to the nature and organization of ADF, these financial statements have been prepared for the specific purpose of reflecting the sources and applications of member contributions and are presented in US dollar equivalents at the reporting dates. With the adoption of the special purpose financial statements, loan loss provisioning has been eliminated. With the exceptions of the aforementioned, the ADF financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. In November 2005, to improve ADF currency management practices, the Board of Governors accepted a resolution to adopt a full-fledged special drawing rights (SDR) approach to facilitate resource administration and operational planning for the benefit of borrowers. The currency management framework was implemented on 1 January 2006 whereby ADB is authorized to convert ADF resources held in various currencies into the currencies which constitute the SDR, to value disbursements, repayments and loan charges in terms of SDR, and to determine the value of contributors paid-in contributions and all other resources of the Fund in terms of SDR, in case of withdrawal of a Contributor or termination of ADF. In July 2007, as an application of the Board-approved currency management exercise, ADB decided to offer a full-fledged special drawing rights (SDR) approach to ADF legacy loans by providing ADF borrowers the option to convert their existing liability (i.e., disbursed and outstanding loan balance) in various currencies into SDR, while the undisbursed portions will be treated as new loans. The conversion was made available beginning 1 January 2008, and as of 31 December 2008, 16 out of 30 ADF borrowing countries have opted to convert their loans, which were carried out on the nearest loan service payment dates from their concurrence. The conversion resulted in a realized gain of $2,088,211,000 with a corresponding reduction in other comprehensive income. Functional Currencies and Reporting Currency The implementation of the full-fledged SDR framework is expected to change the primary economic environment of ADF. Until this process is completed, and a significant change in the primary economic environment becomes evident, the currencies of contributing member countries are functional currencies as these represent the currencies of the primary economic environment in which ADF generates and expends cash. The United States dollar is the reporting currency of the fund.
82

NOTES TO SPECIAL PURPOSE FINANCIAL STATEMENTS 31 December 2008 and 2007
Translation of Currencies ADB adopts the use of daily exchange rates for accounting and financial reporting purposes. This allows transactions in currencies other than USD to be translated to the reporting currency using exchange rates applicable at the time of transactions. At the end of each accounting month, translations of assets, liabilities, and amounts available for operational commitments denominated in non-USD are adjusted using the applicable rates of exchange at the end of the reporting period. Translation adjustments relating to set-aside resources (Note I) are recorded as notional amounts receivable from or payable to OCR. Translation adjustments relating to the maintenance of SDR loans are charged or credited to Unrealized Gains/Losses and reported in the Statement of Revenue and Expenses. All other translation adjustments are charged or credited to accumulated translation adjustments and reported in FUND BALANCES as part of Accumulated Other Comprehensive Income. Investments Investment securities and negotiable certificate of deposits are classified as Available for Sale and are reported at estimated fair value, which represents their fair market value. Unrealized gains and losses are reported in FUND BALANCES as part of Accumulated Other Comprehensive Income. Realized gains and losses are measured by the difference between amortized cost and the net proceeds of sales. Time deposits are reported at cost, which is a reasonable estimate of fair value. Interest income on investment securities and time deposits is recognized as realized and reported, net of amortizations of premiums and discounts. Securities Transferred Under Repurchase Agreement and Securities Purchased Under Resale Arrangement ADF accounts for transfers of financial assets in accordance with FAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities - a replacement of FAS 125. In general, transfers are accounted for as sales when control over the transferred assets has been relinquished. Otherwise the transfers are accounted for as repurchase/resale agreements and collateralized financing arrangements.
Under repurchase agreements, securities transferred are recorded as assets and reported at estimated fair value and cash collateral received are recorded as liabilities. ADB monitors the fair value of the securities transferred under repurchase agreements and the collateral. Under resale arrangements, securities purchased are recorded as assets, while securities received are not recorded as liabilities and are not re-pledged. There were no outstanding securities transferred under repurchase agreement as of 31 December 2008 and 2007. Loans Loan interest income is recognized on accrual basis. It is the policy of ADF to place in non-accrual status loans made to eligible borrowing member countries if the principal or interest with respect to any such loans is overdue by six months. Interest on non-accruing loans is included in revenue only to the extent that payments have actually been received by ADF. ADB maintains a position of not taking part in debt rescheduling agreements with respect to sovereign loans. In the case of nonsovereign loans, ADB may agree to debt rescheduling only after alternative courses of action have been exhausted. When ADB decides that a particular loan is no longer collectible, the entire amount is expensed during the period. Contributed Resources Contributions by donors are included in the financial statements as amounts committed and are reported in Contributed Resources as part of Fund Balances from the date Instruments of Contribution are deposited and related formalities are completed and made available for operational commitments. Contributions are generally received in the currency of the contributor either in cash or notes. Under ADF IX, contributors have the option to pay their contributions under accelerated note encashment (ANE) program and receive a discount. ADF invests the cash generated from this program and the investment income is used to finance operations. The related contributions are recorded at the full undiscounted amount, and the discount is amortized over the standard encashment period of 10 years.
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ADF-7

NOTES TO SPECIAL PURPOSE FINANCIAL STATEMENTS 31 December 2008 and 2007 Advanced Payments on Contributions Payments received in advance or as qualified contributions that cannot be made available for operational commitment are recorded as advance payments and included under Liabilities. Grants and Undisbursed Commitments Grants are recognized in the financial statements when the grant is approved and becomes effective. Upon completion of a project or cancellation of a grant, any undisbursed amount is written back as a reduction in the grants for the year and the corresponding undisbursed commitment is eliminated accordingly. Accounting Estimates The preparation of special purpose financial statements in conformity with generally accepted accounting principles requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets, liabilities, and fund balances as at the end of the year and the reported amounts of revenue and expenses during the year. The actual results could differ from those estimates. Accounting and Reporting Developments In March 2008, the Financial Accounting Standards Board (FASB) issued Statement No. 161 Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133, which will be applicable for fiscal years beginning after 15 November 2008 and interim periods within those fiscal years. This statement amends and expands the disclosure requirements of FAS 133 to provide users with better understanding of (i) how and why an entity uses derivatives; (ii) how derivative instruments and related hedged items are accounted for under FAS 133 and its related interpretations; and (iii) how derivative instruments and hedged items affect an entitys financial position, performance, and cash flows. ADB is currently assessing the impact of this standard on its financial statements. The main investment management objective is to maintain security and liquidity. Subject to these parameters, ADB seeks the highest possible return on its investments. Investments are governed by the Investment Authority approved by the Board of Directors in 1999, and reviewed in 2006. The review endorsed a portfolio strategy that is largely consistent with the 1999 approach. The net unrealized gains on the outstanding ANE portfolio amounted to $19,069,000 ($7,135,000 - 2007). The currency composition of the investment portfolio as of 31 December 2008 and 2007 expressed in United States dollars are as follows: CONTINUED
Special Purpose Statement of Cash Flows For the purposes of the Special Purpose Statement of Cash Flows, ADF considers that its cash and cash equivalents are limited to DUE FROM BANKS. NOTE CINVESTMENTS
Currency Australian dollar Canadian dollar Euro Japanese yen Pound sterling United States dollar Total $
2008 2,581,915,000 583,470,000 604,228,000 2,230,923,000 $
2007 71,531,000 44,620,000 2,806,481,000 366,715,000 995,227,000 2,610,150,000
$6,000,536,000
$6,894,724,000
The estimated fair value and amortized cost of the investments as of 31 December 2008 are as follows:
Estimated Fair Value Due in one year or less Due in one year through five years Due after five years through ten years Total $3,754,777,000 2,165,685,000 80,074,000 $6,000,536,000
Amortized Cost $3,747,964,000 2,071,155,000 73,768,000 $5,892,887,000
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Additional information relating to investments in government and government-guaranteed obligations and corporate bonds is as follows:
2008 As of 31 December: Amortized cost Estimated fair value Gross unrealized gains Gross unrealized losses For the years ended 31 December: Change in net unrealized gains (losses) from prior year Proceeds from sales Gross gain on sales 2007
$5,205,740,000 5,313,389,000 110,118,000 (2,469,000)
$833,026,000 840,063,000 8,402,000 (1,365,000)
100,613,000 14,350,000 365,000
7,874,000
The rate of return on the average investments held during the year, including securities transferred under securities lending arrangement and securities purchased under resale arrangement, based on the portfolio held at the beginning and end of each month, was 3.72% (4.60% - 2007) excluding unrealized gains and losses on investment securities, and 5.17% (4.72% 2007) including unrealized gains and losses on investments. As of 31 December 2008, gross unrealized losses amounted to $2,469,000 ($1,365,000 2007) from government and government-guaranteed obligations and corporate bonds, resulting from market movements. There are no positions in 2008 that sustained unrealized losses for over one year, (fifteen positions representing 1.64% of the investments in 2007). Comparative details for 2008 and 2007 are as follows:
Government and governmentguaranteed obligations Corporate bonds Total
$ 28,416,000 205,417,000 $233,833,000
4,000 2,465,000
$ 28,416,000 205,417,000 $ 233,833,000 Total Fair Value
4,000 2,465,000
$ 2,469,000
$ 2,469,000
Over one year Unrealized Losses
Unrealized Losses
Government and governmentguaranteed obligations Corporate bonds Total
$ 44,608,000 31,361,000 $ 75,969,000
18,000 36,000 54,000
$ 82,419,000 30,989,000 $113,408,000
$ 1,168,000 143,000 $ 1,311,000
$ 127,027,000 62,350,000 $ 189,377,000
$ 1,186,000 179,000 $ 1,365,000
NOTE DLOANS AND LOAN LOSS PROVISION Loans Prior to 1 January 1999, loans of ADF were extended to eligible borrowing member countries, which bore a service charge of 1% and required repayment over periods ranging from 35 to 40 years. On 14 December 1998, the Board of Directors approved an amendment
to ADF loan terms, as follows: (i) for loans to finance specific projects, the maturity was shortened to 32 years including an 8-year grace period; (ii) for program loans to support sector development, the maturity was shortened to 24 years including an 8-year grace period; and (iii) all new loans bear a 1% interest charge during the grace period, and 1.5% during the amortization period, with equal amortization. The revised ADF lending terms took effect on 1 January 1999 for loans for which formal
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ADF-7

NOTES TO SPECIAL PURPOSE FINANCIAL STATEMENTS 31 December 2008 and 2007 loan negotiations were completed on or after 1 January 1999. ADF requires borrowers to absorb exchange risks attributable to fluctuations in the value of the currencies disbursed. In September 2007, the Board of Directors approved a new hard-term ADF lending facility. The facility will have a fixed interest rate of 150 basis points below the weighted average of the ten-year fixed swap rates of the special drawing rights component currencies plus the OCR lending spread, or the current ADF rate, whichever is higher. Other terms are similar to those of regular ADF loans. The interest rate will be reset every January and will apply to all hard-term loans approved that year and will be fixed for the life of the loan. For hard-term ADF loans approved in 2008, the interest rate was set at 3.15% (3.85% 2007). Three loans were approved under this facility in 2008 (nil 2007). ADB believes that there is no comparable market, nor ADB intends to sell ADF loans. The use of market data to arrive at the loan at fair value will give meaningless results. As such, the fair value of loans is determined based on the terms at which a similar loan would currently be made by ADB to a similar borrower. For such loans, fair value approximates the carrying amount. The estimated fair value of loans is not affected by credit risks because the amount of any such adjustment is not considered to have a material effect based on ADB's experience with its borrowers. Undisbursed loan commitments and an analysis of loans by country as of 31 December 2008 are shown in ADF-5. As of 31 December 2008 and 2007, loans to borrowers that exceeded 5% of the total loans outstanding were as follows:
2008 Pakistan Bangladesh Vietnam, Socialist Republic of Sri Lanka Nepal Others (individually less than 5% of total loans) Total Outstanding Loans Provision for HIPC Debt Relief Net Outstanding Loans $ 6,403,379,000 5,743,777,000 2,630,421,000 2,614,832,000 1,564,986,000 7,469,894,000 26,427,289,000 (87,471,000) $26,339,818,000 2007 $ 5,444,555,000 5,399,187,000 2,298,804,000 2,539,657,000 1,486,034,000 6,849,755,000 $24,017,992,000 $24,017,992,000
CONTINUED
The principal amount outstanding of sovereign loans in non-accrual status as of 31 December 2008 was $565,751,000 ($488,901,000 2007) of which $263,444,000 ($209,477,000 - 2007) was overdue. Loans in non-accrual status resulted in $5,176,000 ($4,691,000 2007) not being recognized as income from loans for the year ended 31 December 2008. The accumulated interest on these loans that was not recognized as income as of 31 December 2008 would have totaled $63,802,000 ($50,260,000 2007). The loans in non-accrual status as of 31 December 2008 were 28 loans to Myanmar representing 2.1% of the total outstanding loans (28 loans to Myanmar 2007). During the period, provision for HIPC debt relief amounting to $89,788,000 relating to the Afghanistan debt relief under the HIPC initiative was recognized and charged to income. Of this amount, a total of $527,000 was written-off as the loan service payments of some affected loans fell due. This brought the balance of Provision for HIPC debt relief as of 31 December 2008, including the effects of translation adjustments, to $87,471,000 (nil 31 December 2007) (See Note M). NOTE EDUE FROM CONTRIBUTORS Included in Due From Contributors are notes of contributors and contributions receivable. Notes of contributors are non-negotiable, non-interest-bearing and, subject to certain restrictions imposed by applicable Board of Governors' resolutions, encashable by ADB at par upon demand. ADB currently expects that the notes outstanding at 31 December 2008 will be encashed in varying amounts over a six-year period ending 31 December 2014. The fair value of notes of contributors is determined based on the terms at which notes are currently being accepted from contributors. On this basis, the fair value of outstanding notes of contributors approximates their carrying amount. NOTE FPAYABLE TO RELATED FUNDS The OCR and special fund resources are at all times used, committed, and invested entirely separate from each other. The administrative and operational expenses pertaining to the OCR and ADF are allocated based on operational activities and are settled regularly. Under ADF IX and third regularized replenishment of Technical
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Assistance Special Fund (TASF), a specific portion of the total contributions are to be allocated to TASF. ADF receives all contributions of members and subsequently transfers TASFs portion to TASF. As of 31 December 2008, $31,743,000 representing administration charges was payable to OCR ($28,750,000 2007). No payable to TASF was outstanding in 2008 while $1,419,000 in 2007 corresponds to contributions from donors incorporated in ADF IX for the third regularized replenishment of TASF. NOTE GCONTRIBUTED RESOURCES/ OTHER LIABILITIES As of 31 December 2008, contributions from 30 donors totaling $3,431,219,000 (28 donors totaling $3,290,116,000 2007) were committed for ADF IX. Of these, contributions totaling $3,153,949,000 ($2,270,884,000 2007), including amortized discount totaling $12,112,000 ($7,523,000 2007), were received and made available for operational commitment. These were recorded in Contributed Resources. In May 2008, the Board of Governors approved the allocation of $40,000,000 from OCR's 2007 net income to ADF. As of 31 December 2008, Italy's promissory note received under ADF VI has a remaining balance of 342,000 ($481,000 equivalent). This was recorded in Deferred Credits and included in Other liabilities. NOTE HADMINISTRATIVE EXPENSES AND ADMINISTRATION CHARGE Administrative expenses represent administration charge from OCR which is an apportionment of all administrative expenses of ADB (other than those pertaining directly to ordinary operations and special operations), in the proportion of the relative volume of operational activities of each fund. NOTE ISET-ASIDE RESOURCES Pursuant to the provisions of Article 19, paragraph 1(i) of the Articles of Agreement Establishing the Asian Development Bank (the Charter), the Board of Governors has authorized the setting aside of 10% of the unimpaired paid-in capital paid by member countries pursuant to Article 6, paragraph 2(a) of the Charter and of the
convertible currency portion paid by member countries pursuant to Article 6, paragraph 2(b) of the Charter as of 28 April 1973, to be used as a part of the Special Funds of ADB. The capital so set aside was allocated and transferred from the OCR to ADF as Set-Aside Resources. The capital stock of ADB is defined in Article 4, paragraph 1 of the Charter, in terms of United States dollars of the weight and fineness in effect on 31 January 1966 (the 1966 dollar). Therefore, Set-Aside Resources had historically been translated into the current United States dollar (ADB's unit of account), on the basis of its par value in terms of gold. From 1973 until 31 March 1978, the rate arrived at on this basis was $1.20635 per 1966 dollar. Since 1 April 1978, at which time the Second Amendment to the Articles of Agreement of the International Monetary Fund (IMF) came into effect, currencies no longer had par values in terms of gold. Pending ADB's selection of the appropriate successor to the 1966 dollar, the Set-Aside Resources have been valued for purposes of the accompanying financial statements in terms of the Special Drawing Right (SDR), at the value in current United States dollars as computed by the IMF. As of 31 December 2008, the value of the SDR in terms of the current United States dollar was $1.54781 ($1.57848 - 2007). On this basis, Set-Aside Resources amounted to $73,691,000 ($75,151,000 - 2007). If the capital stock of ADB as of 31 December 2008 had been valued in terms of $12,063.50 per share, Set-Aside Resources would have been $57,434,000. NOTE JCOMPREHENSIVE INCOME Comprehensive Income has two major components: revenue in excess of (less than) expenses and other comprehensive income. Other Comprehensive Income includes unrealized gains and losses on Available for Sale securities and translation adjustments of functional currencies. NOTE KGRANTS AND UNDISBURSED COMMITMENTS The ADF IX introduced financing in the form of grants for the first time. As of 31 December 2008 and 2007, 27 grants amounting to $707,360,000 and 24 grants amounting to $519,340,000 were approved, respectively. During the year, grants totaling $539,800,000 ($377,760,000 2007) became effective.
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ADF-7

NOTES TO SPECIAL PURPOSE FINANCIAL STATEMENTS 31 December 2008 and 2007 The fair value of undisbursed commitments approximates the amount outstanding, because ADB expects that disbursements will substantially be made for all the projects/programs covered by the commitments. NOTE LFAIR VALUE MEASUREMENTS FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability at measurement date (exit price) in an orderly transaction among willing participants with an assumption that the transaction takes place in the entitys principal market, the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The fair value measurement is not adjusted for transaction cost. FAS 157 also establishes a fair value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level CONTINUED
1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3). FAS 157 requires the fair value measurement to maximize the use of market observable inputs. The following guidelines are applied in determining the fair values of financial instruments: Investments, forward contracts, and securities purchased under resale arrangements Readily marketable investments are fair valued using active market quotes in Level 1 category. Level 2 category includes investments, resale arrangements, and forward contracts which are fair valued with significant other market observable inputs. Forward foreign exchange contracts are fair valued using discounted cash flow models. The fair value of the following financial assets of ADF as of 31 December 2008 were reported based on the following:
31 December 2008 Assets Investments Securities purchased under resale arrangement Receivable - forward contracts Total Liabilities Payable - forward contracts
$6,000,536,000 322,361,000 307,811,000 $6,630,708,000
$3,951,007,000 $3,951,007,000
$2,049,529,000 322,361,000 307,811,000 $2,679,701,000
$ 373,041,000
$ 373,041,000
See Notes C, D, E, and K for discussions relating to investments, loans, due from contributors, and undisbursed commitments. In all other cases, the carrying amounts of ADF's assets, liabilities, and fund balances are considered to approximate fair values for all significant financial instruments.
NOTE MHEAVILY INDEBTED POOR COUNTRIES (HIPC) INITIATIVE In April 2008, the Board of Governors adopted the resolution on Providing Heavily Indebted Poor Countries (HIPC) Relief from Asian Development Fund Debt, for ADB to participate in the HIPC debt relief initiative.
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ADF-7

The HIPC debt relief initiative was launched in 1996 by the International Development Association (IDA) and International Monetary Fund (IMF) to address the debt problems of heavily indebted poor countries to ensure that reform efforts in these countries are not put at risk due to their high external debt burden. Under the HIPC debt relief initiative, all bilateral and
multilateral creditors provide debt relief for countries that demonstrated good policy performance over an extended period to bring their debt service burden to sustainable level. As of 31 December 2008, Afghanistan is the only borrower that has qualified for HIPC debt relief.
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TECHNICAL ASSISTANCE SPECIAL FUND

5 March 2009
90
PricewaterhouseCoopers LLP pwc.com/sg 8 Cross Street #17-00 PWC Building Singapore 048424 Telephone (65) 6236 3388 Facsimile (65) 6236 3300
GST No.: M90362193L Reg. No.: T09LL0001D
In our opinion, the accompanying statements of financial position and the related statements of activities and changes in net assets and cash flows present fairly, in all material respects, the financial position of the Asian Development Bank (ADB or the Bank)Technical Assistance Special Fund at 31 December 2008 and 2007, and the results of its activities and changes in net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, managements assertion that ADB maintained effective internal control over financial reporting as of 31 December 2008 is fairly stated, in all material respects, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The management of ADB is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assertion of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on ADBs internal control over financial reporting based on our integrated audit in 2008 and financial statement audit in 2007. We conducted our audits of the financial statements in accordance with auditing standards generally accepted in the United States of America and our audit of internal control over financial reporting in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
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Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying statement of resources as at 31 December 2008 and summary statement of technical assistance approved and effective for the year ended 31 December 2008 are presented for purposes of additional analyses and are not required parts of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. A companys internal control over financial reporting is a process effected by those charged with governance, management, and other personnel, designed to provide reasonable assurance regarding the preparation of reliable financial statements in accordance with accounting principles generally accepted in the United States of America. A companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and those charged with governance; and (iii) provide reasonable assurance regarding prevention, or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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TASF-1
ASIAN DEVELOPMENT BANKTECHNICAL ASSISTANCE SPECIAL FUND

STATEMENT OF FINANCIAL POSITION 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
2008 2007
ASSETS DUE FROM BANKS (Note B) INVESTMENTS (Notes B, C, and G) Time deposits Corporate bonds SECURITIES PURCHASED UNDER RESALE ARRANGEMENT (Notes B and G) ACCRUED REVENUE DUE FROM CONTRIBUTORS (Notes B and F) OTHER ASSETS (Note D) TOTAL LIABILITIES AND UNCOMMITTED BALANCES MISCELLANEOUS LIABILITIES (Note D) UNDISBURSED COMMITMENTS (Notes B, E, and G) UNCOMMITTED BALANCES (TASF-2 and TASF-4) (Notes B and F), represented by: Unrestricted net assets TOTAL
The accompanying notes are an integral part of these financial statements (TASF-6).
1,692
1,306
$156,114 139,429
295,543
$295,078
295,078
111 124 17,304 10,674 $325,448
788 68,489 11,264 $376,925
19 222,722
88 183,718
102,707 $325,448
193,119 $376,925
Annual Report 2008
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TASF-2

STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS For the Years Ended 31 December 2008 and 2007 Expressed in Thousands of United States Dollars (Note B)
2008 CHANGES IN UNRESTRICTED NET ASSETS CONTRIBUTIONS (TASF-4) (Notes B and F) REVENUE From investments (Notes B and C) From other sourcesnet (Note E) Total EXPENSES Technical assistancenet (TASF-5) (Notes B and E) Financial expenses Total CONTRIBUTIONS AND REVENUE LESS THAN EXPENSES EXCHANGE (LOSSES) GAINSnet (Note B) DECREASE IN NET ASSETS NET ASSETS AT BEGINNING OF YEAR NET ASSETS AT END OF YEAR
2007
$ 30,269
52
10,880 138 41,287
14,162 195 14,409
108,159 8 108,167 (66,880) (23,532) (90,412) 193,119 $102,707
77,532 5 77,537 (63,128) 35,714 (27,414) 220,533 $193,119
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TASF-3

2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES Contributions received Interest on investments received Cash received from other sources Technical assistance disbursed Financial expenses paid Net Cash Provided by (Used in) Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Maturities of investments Purchases of investments Net payments for securities purchased under resale arrangement Net Cash (Used in) Provided by Investing Activities Effect of Exchange Rate Changes on Due from Banks Net Increase (Decrease) in Due from Banks Due from Banks at Beginning of Year Due from Banks at End of Year RECONCILIATION OF DECREASE IN NET ASSETS TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: Decrease in net assets (TASF-2) Adjustments to reconcile decrease in net assets to net cash provided by (used in) operating activities: Amortization of discounts/premiums on investments Change in accrued revenue Change in due from contributors Change in other assets Change in miscellaneous liabilities Change in undisbursed commitments Translation adjustments Net Cash Provided by (Used in) Operating Activities
85,526 9,972 172 (70,044) (9) 25,617
51,698 14,721 199 (77,872) (5) (11,259)
11,780,926 (11,804,622) (290) (23,986) (1,245) 386 1,306 $ 1,692 $
3,513,304 (3,502,634) (198) 10,472 265 (522) 1,828 1,306
(90,412)
(27,414)
(1,529) 622 47,187 (826) (64) 39,004 31,635 $ 25,617 $
558 49,918 35 (29) (344) (33,983) (11,259)
Annual Report 2008
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TASF-4

STATEMENT OF RESOURCES 31 December 2008 Expressed in Thousands of United States Dollars (Note B)
Contributions Committed During 2008 DIRECT VOLUNTARY CONTRIBUTIONS Australia Austria Bangladesh Belgium Canada China, Peoples Rep. of Denmark Finland France Germany Hong Kong, China India Indonesia Italy Japan Korea, Rep. of Luxembourg Malaysia Nauru The Netherlands New Zealand Norway Pakistan Portugal Singapore Spain Sri Lanka Sweden Switzerland Taipei,China Thailand Turkey United Kingdom United States Total Transfers to Asian Development Fund Allocation from OCR Net Income Other Resources2 TOTAL $30,269 23,000 $ 250 6,950 70 $ 2,484 159 47 1,394 3,346 1,600 1,963 237 1,698 3,315 100 3,310 250 774 47,710 1,900 909 1,338 1,096 3,279 1,736 1,100 190 6 861 1,035 200 5,617 1,500 $ 89,154 $ 29,368 3,793 3,207 26,638 1,996 4,034 2,058 20,969 26,642 1,397 40 16,320 157,606 8,104 238 333 67 11,823 2,234 4,308 1,344 266 6,189 6,855 5,463 1,710 202 2,720 21,662 65,031 $ 432,617 $ 31,852 3,952 47 4,601 29,984 3,596 5,997 2,295 22,667 29,957 1,497 3,310 290 17,094 205,316 10,004 238 1,242 67 13,161 3,330 7,587 1,736 1,344 1,366 6,379 6 7,716 6,498 1,910 202 2,720 27,279 66,531 Direct Voluntary Contributions Regularized Replenishment1 Total Contributions
$ 7,269
$ 521,771 (3,472) 706,000 178,257 $1,402,556
Note: Figures may not add to total due to rounding. 1 Represents TASF portion of contributions to the replenishment of the Asian Development Fund and the Technical Assistance Special Fund authorized by Governors Resolution Nos. 182, 214 and 300 at historical values. 2 Represents income, repayments, and reimbursement accruing to TASF since 1980. The accompanying notes are an integral part of these financial statements (TASF-6).
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TASF-5

SUMMARY STATEMENT OF TECHNICAL ASSISTANCE APPROVED AND EFFECTIVE For the Year Ended 31 December 2008 Expressed in Thousands of United States Dollars (Note B)
Project Preparation $ (1,122) 970 903 335 (6) 750 7,576 125 121 600 3,475 (161) 300 (47) 1,250 500 (57) 367 180 2,121 (10) 150 121 270 182 3,440 $ 22,333 Project Implementation/ Advisory $ (2,322) 600 (149) 3,791 1,608 1,995 9,390 214 (96) 9,616 3,462 (96) 2,142 (3) (47) (44) 225 5,365 1,487 225 1,903 (81) (161) 541 (5) 1,199 (30) (45) 800 903 (24) 1,875 $ 44,238 $
Recipient Afghanistan Armenia Azerbaijan Bangladesh Bhutan Cambodia China, Peoples Rep. of Cook Islands Fiji Islands Georgia India Indonesia Kazakhstan Kiribati Kyrgyz Republic Lao PDR Malaysia Maldives Marshall Islands Micronesia, Fed. States of Mongolia Nauru Nepal Pakistan Papua New Guinea Philippines Samoa Solomon Islands Sri Lanka Tajikistan Thailand Timor-Leste Tonga Tuvalu Uzbekistan Vanuatu Viet Nam Total Regional Activities TOTAL
Total (3,444) 1,570 754 4,126 1,602 2,745 16,966 339 25 600 13,091 3,301 300 (47) 1,154 2,642 (3) (57) (47) (44) 367 225 5,545 3,608 215 1,903 (81) (161) 691 116 1,469 (30) (45) 800 1,085 (24) 5,315 66,571 41,588 $ 108,159
Notes: Figures may not add to total due to rounding. Negative amounts represent net undisbursed commitments written back to balances available for future commitments (Notes B and E). The accompanying notes are an integral part of these financial statements (TASF-6).
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97
TASF-6

NOTES TO FINANCIAL STATEMENTS 31 December 2007 2008 and 2006 2007 NOTE ANATURE OF OPERATIONS The Technical Assistance Special Fund (TASF) was established to provide technical assistance on a grant basis to developing member countries (DMCs) of the Asian Development Bank (ADB) and for regional technical assistance. TASF resources consist of direct voluntary contributions by members, allocations from the net income of Ordinary Capital Resources (OCR) and Asian Development Fund (ADF) contributions, and revenue from investments and other sources. The eighth replenishment of the Asian Development Fund (ADF IX) and the third regularized replenishment of the Technical Assistance Special Fund (TASF) became effective in April 2005. Under the resolution, a specific portion of the contribution is to be allocated to TASF. In August 2008, the Board of Governors adopted the resolution providing for the ninth replenishment of the Asian Development Fund (ADF X) and the fourth regularized replenishment of the TASF. In conjunction with the ADF replenishment, the resolution provides for a replenishment of the TASF to finance technical operations under the fund. Total replenishment size is SDR7,111,290,000, of which SDR2,641,290,000 will come from new donor contributions. Donors agreed to allocate 3% of the total replenishment size (equivalent to 8% of total donor contributions) to TASF. The ADF X replenishment shall be effective upon receipt of the Instruments of Contribution for Unqualified Contribution commitments in an aggregate amount equivalent to at least SDR1,320,645,000, and such date should not be later than 1 July 2009. NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation of the Financial Statements The financial statements of the TASF are presented on the basis of those for not-for-profit organizations. TASF reports donors contributions of cash and other assets as unrestricted assets as these are made available to TASF without conditions other than for the purpose of pursuing its objectives. Functional and Reporting Currency The United States dollar is the functional and reporting currency, representing the currency of the primary economic operating environment of TASF. Translation of Currencies ADB adopts the use of daily exchange rates for accounting and financial reporting purposes. This allows transactions denominated in non-US dollar to be translated to the reporting currency using exchange rates applicable at the time of transactions. Contributions included in the financial statements during the year are recognized at applicable exchange rates as of the respective dates of commitment. At the end of each accounting month, translations of assets, liabilities, and uncommitted balances which are denominated in non-US dollar are adjusted using the applicable rates of exchange at the end of the reporting period. These translation adjustments are accounted for as exchange gains or losses and are credited or charged to operations. Investments All investment securities held by TASF are reported at estimated fair value, which represents their fair market value. Realized and unrealized gains and losses are included in revenue. Time deposits are reported at cost which is a reasonable estimate of fair value. Interest income on investment securities and time deposits are recognized as realized and reported, net of amortizations of premiums and discounts. Securities Purchased Under Resale Arrangements TASF accounts for transfer of financial assets in accordance with FAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities a replacement of FAS 125. In general, transfers are accounted for as sales under FAS 140 when control over the transferred assets has been relinquished. Otherwise, the transfers are accounted for as repurchase/ resale arrangements and collateralized financing arrangements. Securities purchased under resale arrangement are recorded as assets while securities received are not recorded as liabilities and are not re-pledged.
98

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 Contributions The currency composition of the investment portfolio as of 31 December 2008 and 2007 expressed in United States dollars are as follows:
Currency 2008 2007
The contributions from donors and the allocations from OCR net income are included in the financial statements, from the date of effectivity of the contribution agreement, and the Board of Governors approval, respectively. Technical Assistance to Member Countries and Undisbursed Commitments Technical assistance is recognized in the financial statements when the project is approved and becomes effective. Upon completion or cancellation of a TA project, any undisbursed amount is written back as a reduction in technical assistance for the year and the corresponding undisbursed commitment is eliminated accordingly. Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities and uncommitted balances as at the end of the year and the reported amounts of revenue and expenses during the year. The actual results could differ from those estimates. Statement of Cash Flows For the purposes of the Statement of Cash Flows, the TASF considers that its cash and cash equivalents are limited to DUE FROM BANKS. NOTE CINVESTMENTS The main investment management objective is to maintain security and liquidity. Subject to these parameters, ADB seeks the highest possible return on its investments. Investments are governed by the Investment Authority approved by the Board of Directors in 1999, and reviewed in 2006. The review endorsed a portfolio strategy that is largely consistent with the 1999 approach. Investment securities and negotiable certificate of deposits held as of 31 December 2008 are considered Available for Sale and are reported at fair value, which represents their fair market value. Unrealized gains and losses are included in revenue from investments.
Australian dollar Canadian dollar Euro United States dollar Others Total
$ 25,642,000 42,759,000 16,327,000 199,591,000 11,224,000 $295,543,000
$ 26,278,000 155,810,000 6,479,000 92,493,000 14,018,000 $295,078,000
The annualized rate of return on the average investments held during the year, based on the portfolio held at the beginning and end of each month was 3.60% (4.90% 2007). NOTE DRELATED PARTY TRANSACTIONS The OCR and special fund resources are at all times used, committed, and invested entirely separate from each other. Under ADF IX and the third regularized replenishment of TASF, a specific portion of the total contributions are to be allocated to TASF. ADF receives all contributions of members and subsequently transfers TASFs portion to TASF. Regional technical assistance projects and programs may be combined activities between special and trust funds. Interfund accounts are settled on a regular basis between TASF and the other funds. The interfund account balances included in other assets and miscellaneous liabilities are as follows:
2008 Receivable from: OCR ADF JSF RCIF Agency Trust Funds Net Total Payable to: OCR Agency Trust Funds Net Total $ 12,000 21,000 22,000 73,000 $ 2007 1,419,000 2,000
$ 128,000
$1,421,000
14,000 35,000 49,000
Annual Report 2008
99
TASF-6

NOTES TO FINANCIAL STATEMENTS 31 December 2007 2008 and 2006 2007 NOTE EUNDISBURSED COMMITMENTS Undisbursed commitments are denominated in United States dollars and represent effective ongoing grantfinanced TA projects/programs which are not yet disbursed as of the end of the year. During 2008, an amount of $15,646,000 ($11,875,000 2007) representing completed and canceled TA projects was written back as a reduction in technical assistance of the period and the corresponding undisbursed commitment was eliminated. The fair value of undisbursed commitments approximates the amounts undisbursed, because ADB expects that disbursements will be made for all projects/ programs covered by the commitments. NOTE F CONTRIBUTIONS AND UNCOMMITTED BALANCES Since inception in 1967, direct contributions have been made by 29 member countries. India and Pakistan made direct and voluntary contribution in 2008 of Rs10,000,000 ($250,000 equivalent) and $70,000 respectively. In 1986, 1992 and 2005, the Board of Governors of ADB, in authorizing replenishments of the ADF, provided for allocations to the TASF in aggregate amounts equivalent to $72,000,000, $141,000,000 and $220,000,000, respectively, to be used for technical assistance to ADF borrowing DMCs and for regional technical assistance. The total amount received for ADF IX replenishment for the years ended 31 December 2008 and 2007 amounted to $52,434,000 and $51,622,000 respectively, leaving a total of $17,304,000 as due from contributors ($68,489,000 2007). In 2008, $23,000,000 was allocated out of OCR net income to TASF bringing the accumulated allocation out of OCR net income to $706,000,000. Some of the direct contributions received can be subject to restricted procurement sources, while some are given on condition that the technical assistance be made on a reimbursable basis. The total contributions CONTINUED received for the years ended 31 December 2008 and 2007 were without restrictions. Uncommitted balances comprised of amounts which have not been committed by ADB as at 31 December 2008 and 2007. These balances include approved TA projects/programs that are not yet effective. NOTE GFAIR VALUE MEASUREMENTS FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability at measurement date (exit price) in an orderly transaction among willing participants with an assumption that the transaction takes place in the entitys principal market, the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The fair value measurement is not adjusted for transaction cost. FAS 157 also establishes a fair value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3). FAS 157 requires the fair value measurement to maximize the use of market observable inputs. The following guidelines are applied in determining the fair values of financial instruments: Investments and securities purchased under resale arrangements Readily marketable investments are fair valued using active market quotes in Level 1 category. Level 2 category includes investments and securities purchased under resale arrangements which are fair valued with significant other market observable inputs.
100
TASF-6

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 The fair value of the following financial assets of TASF as of 31 December 2008 were reported based on the following:
Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) $ $ Significant Other Observable Inputs (Level 2) $295,543,000 111,000 $295,654,000 $ Significant Unobservable Inputs (Level 3) $
31 December 2008 Assets Investments Securities purchased under resale arrangement Total $295,543,000 111,000 $295,654,000
See Notes C and E for discussions with respect to investments and undisbursed commitments, respectively. In all other cases, the carrying amounts of
TASF's assets, liabilities, and uncommitted balances are considered to approximate fair values for all significant financial instruments.
Annual Report 2008
101
JAPAN SPECIAL FUND

JAPAN SPECIAL FUND
5 March 2009
102
JAPAN SPECIAL FUND
In our opinion, the accompanying statements of financial position and the related statements of activities and changes in net assets and cash flows present fairly, in all material respects, the financial position of the Asian Development Bank (ADB or the Bank)Japan Special Fund at 31 December 2008 and 2007, and the results of its activities and changes in net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, managements assertion that ADB maintained effective internal control over financial reporting as of 31 December 2008 is fairly stated, in all material respects, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The management of ADB is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assertion of the effectiveness of internal control over financial reporting, included in the accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on ADBs internal control over financial reporting based on our integrated audit in 2008 and financial statement audit in 2007. We conducted our audits of the financial statements in accordance with auditing standards generally accepted in the United States of America and our audit of internal control over financial reporting in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Annual Report 2008
103
A companys internal control over financial reporting is a process effected by those charged with governance, management, and other personnel, designed to provide reasonable assurance regarding the preparation of reliable financial statements in accordance with accounting principles generally accepted in the United States of America. A companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and those charged with governance; and (iii) provide reasonable assurance regarding prevention, or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
JAPAN SPECIAL FUND
104
JSF-1
ASIAN DEVELOPMENT BANKJAPAN SPECIAL FUND

2008 JSF Regular & Supplementary
JAPAN SPECIAL FUND
ACCSF ASSETS DUE FROM BANKS (Note B) INVESTMENTS (Notes A, B, C, and G) Time deposits Corporate Obligations $ 224
Total
ACCSF
Total
489
713
564
185
749
16,133 20,009 36,142
60,908 137,943 198,851 378 2,273 $201,991
77,041 157,952 234,993 463 2,231 $238,400
34,958 34,958 44 18 $35,584
215,146 215,146 247 4,497 $220,075
250,104 250,104 291 4,428 $255,572
ACCRUED REVENUE OTHER ASSETS (Notes B and D)1 TOTAL1 LIABILITIES AND UNCOMMITTED BALANCES ACCOUNTS PAYABLE AND OTHER LIABILITIES (Note D)1 UNDISBURSED COMMITMENTS (Notes B, E, and G) Technical assistance TOTAL LIABILITIES1 NET ASSETS (JSF-2) (Note B), represented by: Uncommitted balances (Notes B and F) Unrestricted Temporarily restricted $
85 $36,451
42
236
236
87
296
296
223 265
95,825 96,061
96,048 96,284
793 880
82,925 83,221
83,718 84,014
28,009 28,009
105,930 105,930
105,930 28,009 133,939
27,545 27,545
136,854 136,854
136,854 27,545 164,399
Net accumulated investment income (Notes B and F) Temporarily restricted
8,177 36,186
105,930
8,177 142,116
7,159 34,704
136,854
7,159 171,558
TOTAL1
$36,451
$201,991
$238,400
$35,584
$220,075
$255,572
The accompanying notes are an integral part of these financial statements (JSF-4). 1 Totals may not add up due to elimination of interfund account of $42,000 ($87,000 - 2007).
Annual Report 2008
105
JSF-2

2008 JSF Regular & ACCSF Supplementary CHANGES IN UNRESTRICTED NET ASSETS CONTRIBUTIONS (Notes B and F) REVENUE FROM INVESTMENTS (Notes B and C) REVENUE FROM OTHER SOURCES NET ASSETS REVERTED BACK TO TEMPORARILY RESTRICTED ASSETS (Notes B and F) Total EXPENSES Technical assistancenet (Notes B, E, and F) Administrative expenses (Note F) Financial expenses Total CONTRIBUTIONS AND REVENUE (LESS THAN) IN EXCESS OF EXPENSES EXCHANGE GAINS (LOSSES) (Note B) (DECREASE) INCREASE IN UNRESTRICTED NET ASSETS CHANGES IN TEMPORARILY RESTRICTED NET ASSETS REVENUE FROM INVESTMENTS AND OTHER SOURCES (Notes B and C) NET ASSETS REVERTED BACK TO TEMPORARILY RESTRICTED ASSETS (Notes B and F) INCREASE IN TEMPORARILY RESTRICTED NET ASSETS INCREASE (DECREASE) IN NET ASSETS NET ASSETS AT BEGINNING OF YEAR NET ASSETS AT END OF YEAR
0 Less than $500. The accompanying notes are an integral part of these financial statements (JSF-4).
Total
ACCSF
Total
JAPAN SPECIAL FUND
$ 17,373 6,459 91
$ 17,373 6,459 91
$ 27,674 11,807 198
$ 27,674 11,807 198
(437) (437)
23,923
(437) 23,486
(26) (26)
39,679
(26) 39,653
(449) 12 0 (437)
53,812 1,278 0 55,090
53,363 1,290 0 54,653
(37) 11 (26)
32,521 1,235 0 33,756
32,484 1,246 0 33,730
(31,167) 243 (30,924)
(31,167) 243 (30,924)
5,923 (12) 5,911
5,923 (12) 5,911
1,045
1,045
1,829
1,829
437 1,482 1,482 34,704 $36,186
(30,924) 136,854 $105,930
437 1,482 (29,442) 171,558 $142,116
26 1,855 1,855 32,849 $34,704
5,911 130,943 $136,854
26 1,855 7,766 163,792 $171,558
106
JSF-3

2008 JSF Regular & Supplementary 2007 JSF Regular & Supplementary
ACCSF
Total
ACCSF
Total
JAPAN SPECIAL FUND
CASH FLOWS FROM OPERATING ACTIVITIES Contributions received Interest on investments received Technical assistance disbursed Administrative expenses paid Financial expenses paid Cash received from other sources Net Cash Provided by (Used in) Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Maturities of investments Purchases of investments Net receipts from (payments for) securities purchased under resale arrangement Net Cash (Used in) Provided by Investing Activities Effect of Exchange Rate Changes on Due from Banks Net (Decrease) Increase in Due from Banks Due from Banks at Beginning of Year Due from Banks at End of Year RECONCILIATION OF INCREASE (DECREASE) IN NET ASSETS TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: Increase (decrease) in net assets (JSF-2) Adjustments to reconcile increase (decrease) in net assets to net cash provided by (used in) operating activities: Amortization of discounts on investments Unrealized investment gains Change in undisbursed commitments Translation adjustment Others-net Net Cash Provided by (Used in) Operating Activities
0 Less than $500.
952 (148) (12) (0) 15 807
17,373 5,559 (38,669) (1,337) (0) 89 (16,985)
17,373 6,511 (38,817) (1,349) (0) 104 (16,178)
$ 1,750 (380) (11) 90 1,449
27,674 12,727 (35,178) (1,172) (0) 254 4,305
27,674 14,477 (35,558) (1,183) (0) 344 5,754
1,075,733 (1,076,880) (1,147)
5,521,344 (5,504,281) 264 17,327
6,597,077 (6,581,161) 264 16,180
630,096 (632,846) (2,750)
3,221,747 (3,228,829) (78) (7,160)
3,851,843 (3,861,675) (78) (9,910)
(340) 564 $ 224 $
(38) 304 185 489 $
(38) (36) 749 713 $
(1,301) 1,865 564 $
5 (2,850) 3,035 185 $
5 (4,151) 4,900 749
1,482
(30,924)
(29,442)
1,855 $
5,911
7,766
(4) (33) (571) (67)
(613) (156) 12,901 (244) 2,051
(617) (189) 12,330 (244) 1,984
(466) 60
(2,592) 67 919
(3,058) 67 979
807
(16,985)
(16,178)
1,449 $
4,305
5,754
The accompanying notes are an integral part of these financial statements (JSF-4).
Annual Report 2008
107
JSF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 NOTE ANATURE OF OPERATIONS The Japan Special Fund (JSF) was established in March 1988 when Government of Japan and the Asian Development Bank (ADB) entered into a financial arrangement whereby Government of Japan agreed to make an initial contribution and ADB became the administrator. The purpose of JSF is to help developing member countries (DMCs) of ADB restructure their economies and broaden the scope of opportunities for new investments, thereby assisting the recycling of funds to DMCs of ADB. While JSF resources are used mainly to finance technical assistance (TA) operations, these resources may also be used for equity investment operations in ADBs DMCs. Under the agreement between ADB and Japan, ADB may invest the proceeds of JSF pending disbursement. In March 1999, the Board approved the acceptance and administration by ADB of the Asian Currency Crisis Support Facility (ACCSF) to assist Asian currency crisis-affected member countries (CAMCs). Funded by Government of Japan, ACCSF was established within JSF to assist in the economic recovery of CAMCs through interest payment assistance (IPA) grants, TA grants, and guarantees. With the general fulfillment of the purpose of the facility, Government of Japan and ADB agreed to terminate the ACCSF on 22 March 2002. The ACCSF account is to be kept open until the completion of all TA disbursements and the settlement of all administrative expenses. NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation of the Financial Statements The financial statements of JSF are presented on the basis of those for not-for-profit organizations and as unrestricted and temporarily restricted net assets. ACCSF funds are separately reported in the financial statements. JSF reports the contributions of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets. When the donor restriction expires, that is, when a stipulated time or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the Statement of Activities and Changes in Net Assets as NET ASSETS RELEASED FROM RESTRICTIONS. Functional and Reporting Currency
JAPAN SPECIAL FUND
The United States dollar is the functional and reporting currency, representing the currency of the primary economic operating environment of JSF. Translation of Currencies ADB adopts the use of daily exchange rates for accounting and financial reporting purposes. This allows transactions denominated in non-US dollar to be translated to the reporting currency using exchange rates applicable at the time of transactions. Contributions included in the financial statements during the year are recognized at applicable exchange rates as of the respective dates of commitment. At the end of each accounting month, translations of assets, liabilities, and uncommitted balances which are denominated in non-US dollar are adjusted using the applicable rates of exchange at the end of the reporting period. These translation adjustments are accounted for as exchange gains or losses and are credited or charged to operations. Investments All investment securities held by JSF are reported at estimated fair value, which represents their fair market value. Realized and unrealized gains and losses are included in revenue. Time deposits are reported at cost which is a reasonable estimate of fair value. Interest income on investment securities and time deposits are recognized as realized and reported, net of amortizations of premiums and discounts. Securities Purchased Under Resale Arrangements JSF accounts for transfer of financial assets in accordance with FAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities a replacement of FAS 125. In general, transfers are accounted for as sales under FAS 140 when control over the transferred assets has been relinquished. Otherwise, the transfers are accounted for as repurchase/resale arrangements and collateralized financing arrangements. Securities purchased under resale arrangement are
108

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 recorded as assets while securities received are not recorded as liabilities and are not re-pledged. There were no outstanding securities purchased under resale arrangements as of 31 December 2008 and 2007. NOTE CINVESTMENTS The main investment management objective is to maintain security and liquidity. Subject to these parameters, ADB seeks the highest possible return on its investments. Investments are governed by the Investment Authority approved by the Board of Directors in 1999, and reviewed in 2006. The review endorsed a portfolio strategy that is largely consistent with the 1999 approach. Investment securities and negotiable certificate of deposits held as of 31 December 2008 are considered Available for Sale and are reported at fair value, which represents their fair market value. Unrealized gains and losses are included in revenue from investments. The annualized rates of return on the average investments held under ACCSF and JSF funds during the year, based on the portfolio held at the beginning and end of each month were 2.90% and 2.94%, respectively (5.24% and 5.26%, respectively - 2007). NOTE DRELATED PARTY TRANSACTIONS The Ordinary Capital Resources (OCR) and special fund resources are at all times used, committed, and invested entirely separate from each other. The administrative and operational expenses pertaining to OCR and special fund resources are charged to the respective funds. The administrative expenses of JSF are settled on a regular basis between OCR and JSF. Regional technical assistance projects and programs may be combined activities between special and trust funds. Interfund accounts are settled on a regular basis between JSF and the other funds. The interfund balances between other funds, which are included in other assets and liabilities are as follows:
2008 Amounts Receivable by: JSF from: ACCSF Agency Trust Funds Total Amounts Payable by: JSF to: OCR TASF Agency Trust Funds Total ACCSF to: JSF $145,000 21,000 $166,000 $ 42,000 $159,000 2,000 24,000 $185,000 $ 87,000 $ 42,000 19,000 $ 61,000 $ 87,000 $ 87,000 2007
JAPAN SPECIAL FUND
Contributions Contributions by Japan are included in the financial statements from the date indicated by Japan that funds are expected to be made available. Contributions which are restricted by the donor for specific TA projects/programs or for IPA grants are classified as temporarily restricted contributions. Those without any stipulation as to specific use are accounted for and reported as unrestricted contributions. Technical Assistance and Undisbursed Commitments Technical assistance is recognized in the financial statements when the project is approved and becomes effective. Upon completion of a TA project or cancellation of a grant, any undisbursed amount is written back as a reduction in the TA for the year and the corresponding undisbursed commitment is eliminated accordingly. Advances are provided from technical assistance grant funds to the executing agency or co-operating institution, for the purpose of making payments for eligible expenses. The advances shall be subject to liquidation and charged against undisbursed commitment, any unutilized portion shall be refunded to the fund. These are included in other assets. Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities as at the end of the year and the reported amounts of income and expenses during the year. The actual results could differ from those estimates. Statement of Cash Flows For the purposes of the Statement of Cash Flows, the JSF considers that its cash and cash equivalents are limited to DUE FROM BANKS.
Annual Report 2008
109
JSF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 NOTE EUNDISBURSED COMMITMENTS Undisbursed commitments are denominated in United States dollars and represent effective TA projects/programs not yet disbursed. Completed but partially cancelled TA projects amounting to $6,883,000 was written back as a reduction in technical assistance during 2008 ($4,749,000 2007), and the corresponding undisbursed commitments was eliminated. Out of this amount, $449,000 ($37,000 2007) corresponds to ACCSF. The fair value of undisbursed commitments approximates the amounts outstanding, because ADB expects that disbursements will substantially be made for all the projects/programs covered by the commitments. NOTE FCONTRIBUTIONS AND UNCOMMITTED BALANCES All contributions for the years ended 31 December 2008 and 2007 were received during the respective years. CONTINUED Effective 31 December 2002, all remaining temporarily restricted net assets under JSF were transferred and integrated into the unrestricted regular net assets, as concurred by Japan, in order to optimize the use of JSF. Similarly, Japan lifted the restriction over the use of net accumulated investment income, which under the original terms of agreement between ADB and Japan, may only be used for defraying JSFs administrative expenses. Japan agreed to use the net accumulated investment income as additional resources for funding future ADB operations. Uncommitted balances comprised of amounts which have not been committed by ADB as at 31 December 2008 and 2007. These balances include approved TA projects/programs that are not yet effective. As of 31 December 2008 and 2007 these balances are as follows:
JAPAN SPECIAL FUND
2008 JSF Regular and Supplementary $105,930,000
2007 JSF Regular and Supplementary $136,854,000
ACCSF Uncommitted balances TA projects/programs approved by Japan and ADB but not yet effective TA projects/programs approved by Japan and not yet effective Uncommitted balances available for new commitments $28,009,000
Total $133,939,000
ACCSF $27,545,000
Total $164,399,000
(14,840,000)
(14,840,000)
(20,135,000)
(20,135,000)
(4,300,000)
(4,300,000)
(12,925,000)
(12,925,000)
$28,009,000
$86,790,000
$114,799,000
$27,545,000
$103,794,000
$131,339,000
The temporarily restricted uncommitted balance remaining available as of 31 December 2008 corresponds to funds under ACCSF of $28,009,000 ($27,545,000 - 2007) to cover completion of TA disbursements and the amount of net accumulated investment income of $8,177,000 ($7,159,000 2007) for settlement of all administrative expenses.
Net assets reverted back to temporarily restricted assets under ACCSF relate to savings on financially completed technical assistance net of amount from accumulated investment income, released from restrictions to defray the administrative expenses of ACCSF.
110
JSF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 NOTE GFAIR VALUE MEASUREMENTS FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability at measurement date (exit price) in an orderly transaction among willing participants with an assumption that the transaction takes place in the entitys principal market, the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The fair value measurement is not adjusted for transaction cost. FAS 157 also establishes a fair value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3). FAS 157 requires the fair value measurement to maximize the use of market observable inputs. The following guidelines are applied in determining the fair values of financial instruments: Investments and securities purchased under resale arrangements Readily marketable investments are fair valued using active market quotes in Level 1 category. Level 2 category includes investments and securities purchased under resale arrangements which are fair valued with significant other market observable inputs. The fair value of the following financial assets of JSF as of 31 December 2008 were reported based on the following:
JAPAN SPECIAL FUND
Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) $12,185,000 Significant Other Observable Inputs (Level 2) $222,808,000 Significant Unobservable Inputs (Level 3) $
31 December 2008 Assets Investments $234,993,000
See Notes C and E for discussions relating to investments and undisbursed commitments. In all other cases, the carrying amounts of JSFs assets, liabilities, and
uncommitted balances are considered to approximate fair values for all significant financial instruments.
Annual Report 2008
111
ASIAN DEVELOPMENT BANK INSTITUTE SPECIAL FUND
In our opinion, the accompanying statement of financial position and the related statements of activities and changes in net assets, and cash flows present fairly, in all material respects, the financial position of the Asian Development Bank (ADB or the Bank)Asian Development Bank Institute Special Fund at 31 December 2008 and 2007, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the management of the Asian Development Bank Institute. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
112
ADBISF-1
ASIAN DEVELOPMENT BANKASIAN DEVELOPMENT BANK INSTITUTE SPECIAL FUND

2008 ASSETS DUE FROM BANKS (Note B) INVESTMENTS (Notes B, C, and D) Time deposits SECURITIES PURCHASED UNDER RESALE ARRANGEMENT (Notes B, C, and D) PROPERTY, FURNITURE, AND EQUIPMENT (Notes B and E) One-time Establishment Cost and Furnitures Lessallowance for depreciation Leased Property Lessallowance for depreciation DUE FROM CONTRIBUTORS (Note F) OTHER ASSETS TOTAL LIABILITIES AND UNCOMMITTED BALANCES ACCOUNTS PAYABLE AND OTHER LIABILITIES (Notes B, E, and H) UNCOMMITTED BALANCES (ADBISF-2) Unrestricted net assets TOTAL
The accompanying notes are an integral part of these financial statements (ADBISF-4)
2007
304
603
6,749
10,405
1,157
$3,398 3,398 243 146
$2,733 2,733 196 78
97 7,759 2,512 $21,077
118 11,716 2,024 $22,367
$ 5,354
$ 4,075
15,723 $21,077
18,292 $22,367
Annual Report 2008
113
ADBISF-2

2008 CHANGES IN UNRESTRICTED NET ASSETS CONTRIBUTIONS (Notes B and F) REVENUE Income from investments (Notes B and C) Income from other sources (Note G) Total EXPENSES Administrative expenses Program expenses Total CONTRIBUTIONS AND REVENUE (LESS THAN) IN EXCESS OF EXPENSES EXCHANGE LOSSESNET TRANSLATION ADJUSTMENTS (Note B) EFFECT OF FASB STATEMENT NO. 158 (Note I) (DECREASE) INCREASE IN UNRESTRICTED NET ASSETS NET ASSETS AT BEGINNING OF YEAR NET ASSETS AT END OF YEAR
The accompanying notes are an integral part of these financial statements (ADBISF-4).
2007
7,759
$ 11,716
85 256 8,100
71 7 11,794
9,743 3,814 13,557 (5,457) (159) 3,337 (290) (2,569) 18,292 $ 15,723
8,782 2,388 11,170 624 (93) 730 (377) 884 17,408 $ 18,292
114
ADBISF-3

2008 CASH FLOWS FROM OPERATING ACTIVITIES Contributions received Interest on investments received Expenses paid Othersnet 2007
12,163 87 (13,009) 97 (662)
11,144 70 (10,839) (86) 289
Net Cash (Used in) Provided by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Maturities of investments Purchases of investments Net (payments for) receipts from securities under resale arrangement Net Cash Provided by (Used in) Investing Activities Effect of Exchange Rate Changes on Due from Banks Net Decrease in Due from Banks Due from Banks at Beginning of Year Due from Banks at End of Year RECONCILIATION OF (DECREASE) INCREASE IN UNRESTRICTED NET ASSETS TO NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES: (Decrease) Increase in unrestricted net assets (ADBISF-2) Adjustments to reconcile (decrease) increase in unrestricted net assets to net cash (used in) provided by operating activities: Depreciation Change in due from contributors Change in other assets Change in accounts payable and other liabilities Translation adjustments Othersnet Net Cash (Used in) Provided by Operating Activities $
220,580 (212,945) (7,406) 229 134 (299) 603 304 $
155,105 (156,267) 511 (651) 269 (93) 696 603
(2,569)
884
48 4,404 (488) 1,279 (3,337) 1 $ (662) $
177 (572) (233) 808 (730) (45) 289
The accompanying notes are an integral part of these financial statements (ADBISF-4).
Annual Report 2008
115
ADBISF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 NOTE ANATURE OF OPERATIONS In 1996, the Asian Development Bank (ADB) approved the establishment of the Asian Development Bank Institute (the Institute) in Tokyo, Japan as a subsidiary body of ADB. The Institute commenced its operations upon the receipt of the first funds from Japan on 24 March 1997, and it was inaugurated on 10 December 1997. The Institutes funds may consist of voluntary contributions, donations, and grants from ADB member countries, non-government organizations, and foundations. The objectives of the Institute, as defined under its Statute, are the identification of effective development strategies and capacity improvement for sound development management in developing member countries. NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation of the Financial Statements The financial statements of the Institute are presented on the basis of those for not-for-profit organizations. The Institute reports donors contributed cash and other assets as unrestricted support as these are made available to the Institute without conditions other than for the purposes of pursuing the objectives of the Institute. Functional Currency and Reporting Currency The functional currency of the Institute is the Japanese yen. The reporting currency is the United States dollar. Translation of Currencies Assets, liabilities, and uncommitted balances are translated from the functional currency to the reporting currency at the applicable rates of exchange at the end of a reporting period. Commitments included in the financial statements during the year are recognized at the applicable exchange rates as of the respective dates of commitment. Revenue and expense amounts in currency other than the United States dollar are translated for each semi-monthly period generally at the applicable rates of exchange at the beginning of each period; such practice approximates the application of average rates in effect during the period. Translation adjustments are accounted for as exchange gains or losses and are credited or charged to operations. Investments All investment securities held by the Institute are reported at estimated fair value which represents their fair market value. Realized and unrealized gains and losses are included in revenue. Time deposits are reported at cost which is a reasonable estimate of fair value. Securities Purchased Under Resale Arrangements ADBI accounts for transfer of financial assets in accordance with FAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities a replacement of FAS 125. In general, transfers are accounted for as sales under FAS 140 when control over the transferred assets has been relinquished. Otherwise, the transfers are accounted for as repurchase/resale arrangements and collateralized financing arrangements. Securities purchased under resale arrangement are recorded as assets and reported at estimated fair value, while securities received are not recorded as liabilities and are not re-pledged. Property, Furniture, and Equipment Property, furniture, and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method. Maintenance, repairs and minor betterments are charged to expense. The Institute distinguishes between capital leases and operating leases based on the objective of the expenditure. Expenditures amounting to more than $30,000 for a single asset or a combination of assets forming an integral part of a separate asset are capitalized. Contributions Contributions from donors are included in the financial statements from the date committed. Accounting Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires
116

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 Management to make estimates and assumptions that affect the reported amounts of assets and liabilities as at the end of the year and the reported amounts of revenue and expenses during the year. Actual results could differ from those estimates. Accounting and Reporting Developments December 2007. All such investments were due within one year. The total investment income reported as of 31 December 2008 consisted of interest income earned during the year. The annualized rate of return on the average investments held during the year including receivable for securities purchased under resale arrangement, based on the portfolio held at the beginning and end of each month was 0.58% (0.58% - 2007). NOTE DFAIR VALUE MEASUREMENTS FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability at measurement date (exit price) in an orderly transaction among willing participants with an assumption that the transaction takes place in the entitys principal market, the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The fair value measurement is not adjusted for transaction cost. FAS 157 also establishes a fair value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3). FAS 157 requires the fair value measurement to maximize the use of market observable inputs. The following guidelines are applied in determining the fair values of financial instruments: Investments and securities purchased under resale arrangements Readily marketable investments are fair valued using active market quotes in Level 1 category. Level 2 category includes investments and securities purchased under resale arrangements which are fair valued with significant other market observable inputs. The fair value of the following financial assets of ADBISF as of 31 December 2008 were reported based on the following:
In December 2008, the FASB issued FASB Staff Position (FSP) FAS 132(R)-1, which amends 132(R) to require more detailed disclosures about employers' plan assets, including employers' investment strategies, major categories of plan assets, concentration of risk within plan assets, and valuation techniques used to measure the fair value of plan assets. This aims to address financial statement users' concerns about the lack of transparency surrounding the types of assets and associated risks in an employer's defined benefit pension or other postretirement plan and events in the economy and markets that could have a significant effect on the value of the plan assets. An entity must provide the FSP's disclosures in financial statements for fiscal years ending after 15 December 2009. Statement of Cash Flows For the purposes of the Statement of Cash Flows, the Institute considers that its cash and cash equivalents are limited to DUE FROM BANKS. Reclassification Certain non-material reclassifications of prior years amounts and information have been made to conform to the current years presentation. NOTE CINVESTMENTS The main investment management objective is to maintain security and liquidity. Subject to these parameters, ADB administers the Institutes investments and seeks the highest possible return on its investments. Investments are governed by the Investment Authority approved by the Board of Directors in 1999, and reviewed in 2006. The review endorsed a portfolio approach that is largely consistent with the 1999 approach. The investment portfolio was composed wholly of investments denominated in Japanese yen as of 31
Annual Report 2008
117
ADBISF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007
CONTINUED
31 December 2008 Assets Securities purchased under resale arrangement
$10,405,000
$10,405,000
See Note B for discussions relating to investments and securities purchased under resale arrangements. In all other cases, the carrying amounts of ADBISF's assets, liabilities, and uncommitted balances are considered to approximate fair values for all significant financial instruments. NOTE ELEASED ASSETS On 6 January 2006, the Institute concluded an agreement regarding the lease of a server, which requires ADBI to pay a total amount of $205,000 over the period of 60 months for the lease of the server. The following is a schedule by years of future minimum lease payments under capital lease together with present value of the net minimum lease payment as of 31 December 2008:
Year ending 31 December 2009 2010 Total minimum lease payment Less: Amount representing interest Present value of net minimum lease payments $ 53,000 53,000 106,000 3,000 $103,000
NOTE GINCOME FROM OTHER SOURCES Income from other sources in 2008 primarily consists of sublease rental income of $171,000, received according to a space sharing agreement with the Japanese Representative Office of ADB. The transactions with ADB were made in the ordinary course of business and were negotiated at arm's length. NOTE HDUE TO ADB Accounts payable and other liabilities include amounts due to ADB of $847,000 and $341,000 at 31 December 2008 and 2007, respectively. The payable results from transactions in the normal course of business. NOTE ISTAFF RETIREMENT PLAN AND POSTRETIREMENT MEDICAL BENEFITS Staff Retirement Plan The Institute participates in the contributory defined benefit Staff Retirement Plan (the Plan) of ADB. Every employee, as defined under the Plan, shall, as a condition of service, become a participant from the first day of service, provided that at such a date, the employee has not reached the normal retirement age of 60. Retirement benefits are based on length of service and highest average remuneration during two years of eligible service. The Plan assets are segregated and are not included in the accompanying Balance Sheet. The costs of administering the Plan are absorbed by ADB, except for fees paid to the investment managers and related charges, including custodian fees, which are borne by the Plan. Participants hired on or before 30 September 2006 are required to contribute 9 1/3% of their salary to the Plan while those hired after that date do not anymore
NOTE FCONTRIBUTIONS In 2008, the Government of Japan committed its 13th contribution to ADBI amounting to 700,900,000 ($7,759,000 equivalent), which was transferred to the Fund on 15 January 2009. The amount contributed was reported in 31 December 2008 balance sheet as Due from Contributors.
118

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 contribute to the plan. Participants may also make additional voluntary contributions. ADBI's contribution is determined at a rate sufficient to cover that part of the costs of the Plan not covered by the participants' contributions. Expected Contributions Investment Committee. The investment of these assets, over the long term, is expected to produce higher returns than short-term investments. The investment policy incorporates the Plans package of desired investment return, and tolerance for risk, taking into account the nature and duration of the Plans liabilities. The Plans assets are diversified among different markets and different asset classes. The use of derivatives for speculation, leverage or taking risks is prohibited. Selected derivatives are used for hedging and transactional efficiency purposes. The Plans investment policy is periodically reviewed and revised to reflect the best interest of the Plans participants and beneficiaries. The current policy, adopted in January 2003, specifies an asset-mix structure of 70% of assets in equities and 30% in fixed income securities. At present, investments of the Plans assets are divided into three categories: US equity, Non-US equity, and US fixed income. As of 31 December 2008 and 2007, the breakdown of the fair value of plan assets held is as follows:
2008 Amount Equity Securities US Non-US Percentage Amount 2007 Percentage
The expected amount of contributions to the Plan for 2009, based on the Institutes contribution rate for the coming year of 19%, and the participants mandatory contribution are $221,000 and $62,000, respectively (2007 - $158,000 and $58,000). Investment Strategy Contributions in excess of current benefits payments are invested in international financial markets and in a variety of investment vehicles. The Plan employs nine external asset managers and one global custodian who function within the guidelines established by the Plans
$ 770,000 518,000 1,288,000 58.6% 39.7 1.7 100.0%
$1,139,000 856,000 1,995,000 762,000 (24,000) $2,733,000 73.0% 27.9 (0.9) 100.0%
Fixed income securities Other Assets (Liabilities)net Total
872,000 38,000 $2,198,000
All investments, excluding time deposits, are valued using market prices. Time deposits are reported at cost which is the reasonable estimate of the fair value. Fixed income securities include US government and government guaranteed obligations, corporate bonds and time deposits. Other assets include forward exchange contracts in various foreign currencies transacted to hedge currency exposure in the investment portfolio, which are reported at fair value. For the year ended 31 December 2008 the net return on the Plan assets was -29.5% (6.0% 2007). ADB expects the long-term rate of return on the assets to be 8%.
Assumptions The assumed overall rate of return takes into account long-term return expectations of the underlying asset classes within the investment portfolio mix, and the expected duration of the Plans liabilities. Return expectations are forward looking and, in general, not much weight is given to short-term experience. Unless there is a drastic change in investment policy or market environment, the assumed investment return of 8% on the Plans assets is expected to remain broadly the same, year to year.
Annual Report 2008
119
ADBISF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 Postretirement Medical Benefits Plan The Institute participates in the cost-sharing plan of ADB for retirees medical insurance premiums. Under the plan, the Institute is obligated to pay 75% of the Group Medical Insurance Plan premiums for retirees and their eligible dependents who elected to participate. The cost-sharing plan is currently unfunded. CONTINUED Generally accepted accounting principles require an actuarially determined assessment of the periodic cost of postretirement medical benefits. The following table sets forth the pension and postretirement benefits at 31 December 2008 and 31 December 2007:
Pension Benefits 2008 Change in benefit obligation: Projected benefit obligation at beginning of year Service cost Interest cost Plan participants contributions Transfers Actuarial (gain) loss Benefits paid Projected benefit obligation at end of year Change in plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Employers contribution Plan participants contributions Transfers Benefits paid Fair value of plan assets at end of year Funded Status Amounts recognized in the Balance sheet consist of: Current liability Non-current liability Net amount recognized Amounts recognized in the Unrestricted net assets consist of: Net actuarial loss (gain) Prior service cost (credit) Net amount recognized Weighted-average assumptions as of 31 December Discount rate Expected return on plan assets Rate of compensation increase varies with age and averages 2007
$ 4,960,000 163,000 305,000 322,000 (818,000) (88,000) $ 4,844,000
$ 4,269,000 126,000 258,000 49,000 232,000 430,000 (404,000) $ 4,960,000
98,000 20,000 7,000 (8,000) (21,000) 96,000
231,000 14,000 15,000 (152,000) (10,000) 98,000
$ 2,733,000 (851,000) 82,000 322,000 (88,000) $ 2,198,000 $(2,646,000)
$ 2,623,000 149,000 84,000 49,000 232,000 (404,000) $ 2,733,000 $(2,227,000)
21,000 (21,000) (96,000)
10,000 (10,000) (98,000)
$ $
$ $
(2,646,000)
(2,227,000)
$ $
(96,000) (96,000)
$ $
(98,000) (98,000)
$(2,646,000)
$(2,227,000)
994,000 10,000
$ $
761,000 15,000 776,000
$ (395,000) (1,000) $ (396,000)
$ (426,000) (32,000) $ (458,000)
$ 1,004,000
7.25% 8.00% 5.05%
6.00% 8.00% 4.65%
7.25% N/A 5.05%
6.00% N/A 4.65%
120
ADBISF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 For measurement purposes, a 9.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for the valuation as at 31 December 2008. The rate was assumed to decrease gradually to 5.0% for 2013 and remain at that level thereafter.
Pension Benefits
2008 Components of net periodic benefit cost: Service cost Interest cost Expected return on plan assets Amortization of prior service cost Recognized actuarial loss Net periodic benefit cost
2007
$163,000 305,000 (226,000) 5,000 26,000 $273,000
$126,000 258,000 (198,000) 5,000 $191,000
$ 20,000 7,000 (31,000) (39,000) $(43,000)
$ 14,000 15,000 (31,000) (24,000) $(26,000)
The accumulated benefit obligation of the pension plan as of 31 December 2008 was $4,635,000 ($4,726,000 2007). A one-percentage-point change in assumed health care cost trend rates would have the following effects:
1-PercentagePoint Increase Effect on total service and interest cost components Effect on postretirement benefit obligation 1-PercentagePoint Decrease
Estimated Future Benefits Payments The following table shows the benefit payments expected to be paid in each of the next five years and subsequent five years. The expected benefit payments are based on the same assumptions used to measure the benefit obligation at 31 December 2008:
Pension Benefits 2009 2010 2011 2012 2013 2014-2018 $ 215,000 179,000 209,000 241,000 272,000 1,671,000 Postretirement Medical Benefits $ 1,000 12,000
$ 7,000 22,000
$ (5,000) (19,000)
Annual Report 2008
121
ASIAN TSUNAMI FUND

ASIAN TSUNAMI FUND
5 March 2009
122
In our opinion, the accompanying statements of financial position and the related statements of activities and changes in net assets and cash flows present fairly, in all material respects, the financial position of the Asian Development Bank (ADB or the Bank)Asian Tsunami Fund at 31 December 2008 and 2007, and the results of its activities and changes in net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, managements assertion that ADB maintained, effective internal control over financial reporting as of 31 December 2008 is fairly stated, in all material respects, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The management of ADB is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assertion of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on ADBs internal control over financial reporting based on our integrated audit in 2008 and financial statement audit in 2007. We conducted our audits of the financial statements in accordance with auditing standards generally accepted in the United States of America and our audit of internal control over financial reporting in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
ASIAN TSUNAMI FUND
Annual Report 2008
123
ASIAN TSUNAMI FUND
124
ATF-1
ASIAN DEVELOPMENT BANKASIAN TSUNAMI FUND

2008 ASSETS DUE FROM BANKS (Note B) INVESTMENTS (Notes B, C, and G) Time deposits Corporate bonds ACCRUED REVENUE ADVANCES FOR GRANTS (Note B) TOTAL LIABILITIES AND UNCOMMITTED BALANCES ACCOUNTS PAYABLE AND OTHER LIABILITIES (Note D) UNDISBURSED COMMITMENTS (Notes B, E, and G) UNCOMMITTED BALANCES (ATF-2) (Notes B and F), represented by: Unrestricted net assets TOTAL
The accompanying notes are an integral part of these financial statements (ATF-4).
2007
383
161
ASIAN TSUNAMI FUND
$ 93,032 158,256
251,288 731 43,017 $295,419
$366,524
366,524 375 62,443 $429,503
694 248,338
363 389,132
46,387 $295,419
40,008 $429,503
Annual Report 2008
125
ATF-2

2008 2007
CHANGES IN UNRESTRICTED NET ASSETS REVENUE From investments (Notes B and C) From other sources EXPENSES Technical assistance (Notes B and E) Administrative expenses (Note D) Financial expenses REVENUE IN EXCESS OF EXPENSES EXCHANGE LOSSES (Note B) INCREASE IN NET ASSETS NET ASSETS AT BEGINNING OF YEAR NET ASSETS AT END OF YEAR
$ 9,125 215
9,340
$ 22,257 389
$ 22,646
ASIAN TSUNAMI FUND
2,849 2
2,851 6,489 (110) 6,379 40,008 $ 46,387
(115) 2,218 1
2,104 20,542 (16) 20,526 19,482 $ 40,008
126
ATF-3

2008 CASH FLOWS FROM OPERATING ACTIVITIES Interest on investments received Grants / Technical assistance disbursed Administrative expenses paid Cash received from other sources Net Cash Used in Operating Activities 2007
7,622 (121,820) (2,178) 216 (116,160)
22,644 (128,707) (2,107) 387 (107,783)
ASIAN TSUNAMI FUND
CASH FLOWS FROM INVESTING ACTIVITIES Maturities of investments Purchases of investments Net Cash Provided by Investing Activities Net Increase (Decrease) in Due from Banks Due from Banks at Beginning of Year Due from Banks at End of Year RECONCILIATION OF INCREASE IN NET ASSETS TO NET CASH USED IN OPERATING ACTIVITIES: Increase in net assets (ATF-2) Adjustments to reconcile increase in net assets to net cash used in operating activities: Amortization of discounts/premiums on investments Change in accrued revenue Change in advances for grants Change in accounts payable and other liabilities Change in undisbursed commitments Change in unrealized investment gains Net Cash Used in Operating Activities
9,337,364 (9,220,982) 116,382 222 161 $ 383 $
9,180,041 (9,072,380) 107,661 (122) 283 161
6,379
20,526
(834) (357) 19,427 331 (140,794) (312) $ (116,160) $
386 (20,543) 110 (108,262) (107,783)
Annual Report 2008
127
ATF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 NOTE ANATURE OF OPERATIONS The Asian Tsunami Fund (ATF) was established on 11 February 2005 in response to the special circumstances surrounding the developing member countries (DMCs) that were stricken by the effects of the tsunami on 26 December 2004. The purpose of ATF is to provide emergency grant financing promptly and effectively to affected DMCs in the form of technical assistance (TAs) and investment projects to support reconstruction, rehabilitation and associated development activities following the tsunami disaster. ATF will serve as a dedicated source of grant financing to support priority rehabilitation and reconstruction needs on a multi-sector basis. Resources from the Fund will be available to central governments and other suitable entities including non-governmental organizations. ATFs resources may consist of allocations from the net income of Ordinary Capital Resources (OCR) and contributions from bilateral, multilateral and individual sources. NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation of the Financial Statements The financial statements of the ATF are presented on the basis of those for not-for-profit organizations. ATF reports donors contributions of cash and other assets as unrestricted assets as these are made available to ATF without conditions other than for the purpose of pursuing its objectives. Functional and Reporting Currency The United States dollar is the functional and reporting currency, representing the currency of the primary economic operating environment of ATF. Translation of Currencies ADB adopts the use of daily exchange rates for accounting and financial reporting purposes. This allows transactions denominated in non-US dollar to be translated to the reporting currency using exchange rates applicable at the time of transactions. Contributions included in the financial statements during the year are recognized at applicable exchange rates as of the respective dates of commitment. At the end of each accounting month, translations of assets, liabilities, and uncommitted balances which are denominated in non-US dollar are adjusted using the applicable rates of exchange at the end of the reporting period. These translation adjustments are accounted for as exchange gains or losses and are credited or charged to operations. Investments All investment securities held by ATF are reported at estimated fair value, which represents their fair market value. Realized and unrealized gains and losses are included in revenue. Time deposits are reported at cost which is a reasonable estimate of fair value. Interest income on investment securities and time deposits are recognized as realized and reported, net of amortizations of premiums and discounts. Contributions The contributions from donors and the allocations from OCR net income are included in the financial statements, from the date of effectivity of the contribution agreement, and the Board of Governors approval, respectively. Technical Assistance, Grants and Undisbursed Commitments Technical Assistance and grants are recognized in the financial statements when the project is approved and becomes effective. Upon completion of the TA project or cancellation of a grant, any undisbursed amount is written back as a reduction in technical assistance or grants for the year and the corresponding undisbursed commitment is eliminated accordingly. Advances are provided from technical assistance grant funds to the executing agency or co-operating institution, for the purpose of making payments for eligible expenses. The advances shall be subject to liquidation and charged against undisbursed commitment, any unutilized portion shall be refunded to the fund.
ASIAN TSUNAMI FUND
128

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities and uncommitted balances as at the end of the year and the reported amounts of revenue and expenses during the year. The actual results could differ from those estimates. Statement of Cash Flows For the purposes of the Statement of Cash Flows, ATF considers that its cash and cash equivalents are limited to DUE FROM BANKS. NOTE CINVESTMENTS The main investment management objective is to maintain security and liquidity. Subject to these parameters, ADB seeks the highest possible return on its investments. Investments are governed by the Investment Authority approved by the Board of Directors in 1999, and reviewed in 2006. The review endorsed a portfolio strategy that is largely consistent with the 1999 approach. Investment securities and negotiable certificate of deposits held as of 31 December 2008 are classified as Available for Sale and are reported at fair value, which represents their fair market value. Unrealized gains and losses are included in revenue from investments. The annualized rate of return on the average investments held during the year, based on the portfolio held at the beginning and end of each month was 2.96% (5.27% 2007). NOTE DRELATED PARTY TRANSACTIONS The OCR and special fund resources are at all times used, committed, and invested entirely separate from each other. The administrative and operational expenses pertaining to ATF are settled on a regular basis between OCR and ATF. As of 31 December 2008, $669,000 ($343,000 2007) was payable to OCR which is included in accounts payable and other liabilities. NOTE EUNDISBURSED COMMITMENTS Undisbursed commitments are denominated in United States dollars and represent effective technical assistance and grants not yet disbursed. The fair value of undisbursed commitments approximates the amounts outstanding, because ADB expects that disbursements will substantially be made for all the projects/programs covered by the commitments. In 2008, there were no undisbursed commitments on closed TA projects that were written back as a reduction of technical assistance ($115,000 2007). NOTE F CONTRIBUTIONS AND UNCOMMITTED BALANCES In April and May 2005, ADB contributed $600,000,000 from OCR surplus to ATF. Contributions were also received from Australia and Luxembourg amounting to $3,796,000 and $1,000,000, respectively. In November 2005, following the establishment of Pakistan Earthquake Fund (PEF) in response to the special circumstances surrounding the 8 October 2005 earthquake in Pakistan, unutilized ATF fund of $40,000,000 was transferred back to OCR, which was subsequently transferred to PEF. Another $10,000,000 was returned to OCR in June 2006 and was committed as ADBs contribution to the Java Reconstruction Fund in November 2008, to support post-disaster management, rehabilitation, immediate construction, and urgent vital development activities in Yogyakarta and Central Java in Indonesia. No contributions were received in 2008 and 2007. Uncommitted balances comprised of amounts which have not been committed by ADB as at 31 December 2008 and 2007. NOTE GFAIR VALUE MEASUREMENTS FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability at measurement date (exit price) in an orderly transaction among willing participants with an assumption that the transaction takes place in the entitys principal market, the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the
ASIAN TSUNAMI FUND
Annual Report 2008
129
ATF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 amount received for the asset or minimize the amount paid to transfer the liability. The fair value measurement is not adjusted for transaction cost. FAS 157 also establishes a fair value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3). FAS 157 requires the fair value measurement to maximize the use of market observable inputs. CONTINUED The following guidelines are applied in determining the fair values of financial instruments: Investments Readily marketable investments are fair valued using active market quotes in Level 1 category. Level 2 category includes investments which are fair valued with significant other market observable inputs. The fair value of the following financial assets of ATF as of 31 December 2008 were reported based on the following:
Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) $88,455,000 Significant Other Observable Inputs (Level 2) $162,833,000 Significant Unobservable Inputs (Level 3) $
ASIAN TSUNAMI FUND
See Notes C and E for discussions relating to investments and undisbursed commitments. In all other cases, the carrying amounts of the ATF's assets,
liabilities, and uncommitted balances are considered to approximate fair values for all significant financial instruments.
130
PAKISTAN EARTHQUAKE FUND

5 March 2009
Annual Report 2008
131
In our opinion, the accompanying statements of financial position and the related statements of activities and changes in net assets and cash flows present fairly, in all material respects, the financial position of the Asian Development Bank (ADB or the Bank)Pakistan Earthquake Fund at 31 December 2008 and 2007, and the results of its activities and changes in net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, managements assertion that ADB maintained effective internal control over financial reporting as of 31 December 2008 is fairly stated, in all material respects, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The management of ADB is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assertion of the effectiveness of internal control over financial reporting, included in the accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on ADBs internal control over financial reporting based on our integrated audit in 2008 and financial statement audit in 2007. We conducted our audits of the financial statements in accordance with auditing standards generally accepted in the United States of America and our audit of internal control over financial reporting in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
132
Annual Report 2008
133
PEF-1
ASIAN DEVELOPMENT BANKPAKISTAN EARTHQUAKE FUND

2008 ASSETS DUE FROM BANKS (Note B) INVESTMENTS (Notes B, C, and G) Government or government-guaranteed obligations Time deposits ACCRUED REVENUE DUE FROM CONTRIBUTORS (Notes B and F) ADVANCES FOR GRANTS (Note B) TOTAL LIABILITIES AND UNCOMMITTED BALANCES MISCELLANEOUS LIABILITIES (Note D) UNDISBURSED COMMITMENTS (Notes B, E, and G) UNCOMMITTED BALANCES (PEF-2) (Notes B and F), represented by: Unrestricted net assets TOTAL
The accompanying notes are an integral part of these financial statements (PEF-4).
2007
823
$ 1,601
$ 8,066 53,237
$ 61,303 111 2,973 3,187 $68,397
60,690
60,690 121 6,395 1,007 $69,814
33 66,161
30 73,237
2,203 $68,397
(3,453) $ 69,814
134
PEF-2

2008 CHANGES IN UNRESTRICTED NET ASSETS CONTRIBUTIONS (Notes B and F) REVENUE From investments (Notes B and C) From other sources Total $ 10,225 $ 19,123 2007
3,078 171
$ 3,249 13,474
2,387 201
2,588 21,711
EXPENSES Grants (Note B) Technical assistance (Notes B and E) Administrative expenses (Note D) CONTRIBUTIONS AND REVENUE IN EXCESS OF (LESS THAN) EXPENSES NET EXCHANGE (LOSSES) GAINS (Note B) INCREASE (DECREASE) IN NET ASSETS NET ASSETS AT BEGINNING OF YEAR NET ASSETS AT END OF YEAR
171
171
30,000 2,000 70
32,070
13,303 (7,647) 5,656 (3,453) $ 2,203
(10,359) 860 (9,499) 6,046 $ (3,453)
Annual Report 2008
135
PEF-3

2008 CASH FLOWS FROM OPERATING ACTIVITIES Contributions received Interest on investments received Cash received from other sources Grants and technical assistance disbursed Administrative and financial expenses paid Net Cash Provided by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Maturities of investments Acquisition of investments Net Cash Used in Investing Activities Effect of Exchange Rate Changes on Due from Banks Net Decrease in Due from Banks Due from Banks at Beginning of Year Due from Banks at End of Year RECONCILIATION OF INCREASE (DECREASE) IN NET ASSETS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Increase (decrease) in net assets (PEF-2) Adjustments to reconcile increase (decrease) in net assets to net cash provided by operating activities: Amortization of discounts/premiums on investments Change in accrued revenue Change in due from contributors Change in advances for grants Change in miscellaneous liabilities Change in undisbursed commitments Translation adjustments Change in unrealized investment holding gains Net Cash Provided by Operating Activities
2007
13,094 2,940 171 (9,256) (168) 6,781
25,100 2,331 201 (1,980) (40) 25,612
1,134,641 (1,141,160) (6,519) (1,040) (778) 1,601 $ 823 $
767,960 (793,545) (25,585) (44) (17) 1,618 1,601
5,656
(9,499)
(97) 10 2,255 (2,180) 4 (7,077) 8,261 (51) $ 6,781 $
(56) 5,257 (717) 30 30,737 (140) 25,612
136

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 NOTE ANATURE OF OPERATIONS The Pakistan Earthquake Fund (PEF) was established on 14 November 2005 in response to the special circumstances confronted by Pakistan resulting from the effects of an earthquake on 8 October 2005. The objective of the PEF is to deliver emergency grant financing promptly and effectively to Pakistan in the form of technical assistance (TA) and investment projects to support reconstruction, rehabilitation, and associated development activities. PEF resources will be available to the Government of Pakistan and other suitable entities acceptable to the Government of Pakistan and ADB, including, where appropriate, non-government organizations. PEFs resources may consist of allocations from the net income of Ordinary Capital Resources (OCR) and contributions from bilateral, multilateral, and individual sources. NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation of the Financial Statements The financial statements of the PEF are presented on the basis of those for not-for-profit organizations. PEF reports donors contributions of cash and other assets as unrestricted assets as these are made available to PEF without conditions other than for the purpose of pursuing its objectives. Functional and Reporting Currency The United States dollar is the functional and reporting currency, representing the currency of the primary economic operating environment of PEF. Translation of Currencies ADB adopts the use of daily exchange rates for accounting and financial reporting purposes. This allows transactions denominated in non-US dollar to be translated to the reporting currency using exchange rates applicable at the time of transactions. Contributions included in the financial statements during the year are recognized at applicable exchange rates as of the respective dates of commitment. At the end of each accounting month, translations of assets, liabilities, and uncommitted balances which are denominated in non-US dollar are adjusted using the applicable rates of exchange at the end of the reporting period. These translation adjustments are accounted for as exchange gains or losses and are credited or charged to operations. Investments All investment securities held by PEF are reported at estimated fair value, which represents their fair market value. Realized and unrealized gains and losses are included in revenue. Time deposits are reported at cost which is a reasonable estimate of fair value. Interest income on investment securities and time deposits are recognized as realized and reported, net of amortizations of premiums and discounts. Contributions The contributions from donors and the allocations from OCR net income are included in the financial statements, from the date of effectivity of the contribution agreement, and the Board of Governors approval, respectively. Technical Assistance, Grants and Undisbursed Commitments Technical assistance and grants are recognized in the financial statements when the project is approved and becomes effective. Upon completion of a TA project or cancellation of a grant, any undisbursed amount is written back as a reduction in technical assistance or grants for the year and the corresponding undisbursed commitment is eliminated accordingly. Advances are provided from technical assistance grant funds to the executing agency or co-operating institution, for the purpose of making payments for eligible expenses. The advances shall be subject to liquidation and charged against undisbursed commitment, any unutilized portion shall be refunded to the fund. Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities and uncommitted balances as at the end of the year and
Annual Report 2008
137
PEF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 the reported amounts of revenue and expenses during the year. The actual results could differ from those estimates. Statement of Cash Flows For the purposes of the Statement of Cash Flows, PEF considers that its cash and cash equivalents are limited to DUE FROM BANKS. NOTE CINVESTMENTS The main investment management objective is to maintain security and liquidity. Subject to these parameters, ADB seeks the highest possible return on its investments. Investments are governed by the Investment Authority approved by the Board of Directors in 1999, and reviewed in 2006. The review endorsed a portfolio strategy that is largely consistent with the 1999 approach. Investment securities and negotiable certificate of deposits as of 31 December 2008 are considered Available for Sale and are reported at fair value, which represents their fair market value. Unrealized gains and losses are included in revenue from investments. The currency compositions of the investment portfolio as of 31 December 2008 and 2007 expressed in United States dollars are as follows:
Currency Pakistan rupee United States dollar Total 2008 $25,087,000 36,216,000 $61,303,000 2007 $22,689,000 38,001,000 $60,690,000
CONTINUED NOTE EUNDISBURSED COMMITMENTS Undisbursed commitments are denominated in United States dollars and represent effective grants not yet disbursed. The fair value of undisbursed commitments approximates the amounts outstanding, because ADB expects that disbursements will substantially be made for all the projects/programs covered by the commitments. NOTE F CONTRIBUTIONS AND UNCOMMITTED BALANCES
The annualized rate of return on the average investments held during the year, based on the portfolio held at the beginning and end of each month was 5.24% (5.81% 2007). NOTE DRELATED PARTY TRANSACTIONS The OCR and special fund resources are at all times used, committed, and invested entirely separate from each other. The administrative and operational expenses pertaining to PEF are settled on a regular basis between OCR and PEF. As of 31 December 2008, $4,000 was payable to OCR ($5,000 2007) which is included in miscellaneous liabilities.
In November 2005, ADB transferred $80,000,000 from OCR Surplus to PEF. Contributions were also received from Australia and Finland amounting to $15,036,000 and $12,261,000, respectively. In 2006 and 2007, instruments of contributions were received from the Government of Norway and the Kingdom of Belgium which undertook to make contributions to the PEF a maximum amount of $20,000,000 and 9,924,000, respectively. This is by way of a debt-for development swap arrangement with Pakistan, where Pakistan shall match the value of debt and debt service cancellations with equivalent amounts in Pakistan rupees, which shall be transferred to the Fund as Norways and Belgiums contributions. In 2008, PEF received the remaining contributions due from Norway and Belgium amounting to $5,000,000 and 3,308,000 ($5,225,000 equivalent), respectively. In 2006, the Government of Australia committed A$20,000,000 ($15,036,000 equivalent). Of this amount, A$4,300,000 ($2,973,000 equivalent) has not been received as of 31 December 2008 and was recorded as Due from Contributors. Uncommitted balances comprised of amounts which have not been committed by ADB as at 31 December 2008, and committed amount which exceeded cumulative resources as of 31 December 2007. This shortfall was covered by additional contributions from Norway and Belgium in 2008. NOTE GFAIR VALUE MEASUREMENTS FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability at measurement date (exit price) in an orderly transaction among willing participants with an assumption that the transaction takes place in the entitys principal market,
138
PEF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The fair value measurement is not adjusted for transaction cost. FAS 157 also establishes a fair value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3). FAS 157 requires the fair value measurement to maximize the use of market observable inputs. The following guidelines are applied in determining the fair values of financial instruments: Investments Readily marketable investments are fair valued using active market quotes in Level 1 category. Level 2 category includes investments which are fair valued with significant other market observable inputs. The fair value of the following financial assets of PEF as of 31 December 2008 were reported based on the following:
Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) $ Significant Other Observable Inputs (Level 2) $61,303,000 Significant Unobservable Inputs (Level 3) $
See Notes C and E for discussions relating to investments and undisbursed commitments. In all other cases, the carrying amount of PEFs assets, liabilities and
Annual Report 2008
139
REGIONAL COOPERATION AND INTEGRATION FUND

The management of Asian Development Bank (ADB) is responsible for establishing and maintaining adequate internal control over financial reporting. ADB's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. ADB's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of ADB; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of ADB are being made only in accordance with authorizations of management and directors of ADB; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of ADB's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ADB's management assessed the effectiveness of ADB's internal control over financial reporting as of 31 December 2008. In making this assessment, ADB's management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control Integrated Framework. Based on that assessment, management believes that as of 31 December 2008, ADB's internal control over financial reporting is effective based upon the criteria established in Internal Control Integrated Framework.
5 March 2009
140
In our opinion, the accompanying statements of financial position and the related statements of activities and changes in net assets and cash flows present fairly, in all material respects, the financial position of the Asian Development Bank (ADB or the Bank)Regional Cooperation and Integration Fund at 31 December 2008 and 2007, and the results of its activities and changes in net assets and its cash flows for the year ended 31 December 2008 and for the period from 26 February 2007 (establishment of the Fund) to 31 December 2007, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, managements assertion that ADB maintained effective internal control over financial reporting as of 31 December 2008 is fairly stated, in all material respects, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The management of ADB is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assertion of the effectiveness of internal control over financial reporting, included in the accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on ADBs internal control over financial reporting based on our integrated audit in 2008 and financial statement audit in 2007. We conducted our audits of the financial statements in accordance with auditing standards generally accepted in the United States of America and our audit of internal control over financial reporting in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Annual Report 2008
141
142
RCIF-1
ASIAN DEVELOPMENT BANKREGIONAL COOPERATION AND INTEGRATION FUND

2008 2007
ASSETS DUE FROM BANKS (Note B) INVESTMENTS (Notes B, C, and G) Government and government-guaranteed obligations Time deposits Corporate bonds ACCRUED REVENUE $ 1,446 $ 1,240
$ 6,104 8,199 24,973
$ 39,276 154 335 $41,211
39,925
39,925 61 $41,226
ADVANCES FOR GRANTS (Note B) TOTAL LIABILITIES AND UNCOMMITTED BALANCES MISCELLANEOUS LIABILITIES (Note D) UNDISBURSED COMMITMENTS (Notes B, E, and G) UNCOMMITTED BALANCES (RCIF-2) (Notes B and F), represented by: Unrestricted net assets TOTAL
The accompanying notes are an integral part of these financial statements (RCIF-4).
52 16,571
9 7,400
24,588 $41,211
33,817 $41,226
Annual Report 2008
143
RCIF-2

STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS For the Year Ended 31 December 2008 and For the Period 26 February to 31 December 2007 Expressed in Thousands of United States Dollars (Note B)
2008 CHANGES IN UNRESTRICTED NET ASSETS CONTRIBUTIONS (Notes B and F) REVENUE From investments (Notes B and C) From other sources Total EXPENSES Technical assistance (Notes B and E) Administrative expenses (Note D) CONTRIBUTIONS AND REVENUE (LESS THAN) IN EXCESS OF EXPENSES NET EXCHANGE LOSSES (Note B) (DECREASE) INCREASE IN NET ASSETS NET ASSETS AT BEGINNING OF YEAR NET ASSETS AT END OF YEAR
2007
$ 40,000
1,244 34
$ 1,278 1,278
1,186 40
1,226 41,226
10,458 41
10,499
7,400 9
7,409
(9,221) (8) (9,229) 33,817 $ 24,588
33,817 33,817 $ 33,817
144
RCIF-3

STATEMENT OF CASH FLOWS For the Year Ended 31 December 2008 and For the Period 26 February to 31 December 2007 Expressed in Thousands of United States Dollars (Note B)
2008 CASH FLOWS FROM OPERATING ACTIVITIES Contributions received Interest on investments received Cash received from other sources Technical assistance disbursed Administrative and financial expenses paid Net Cash (Used in) Provided by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Maturities of investments Acquisition of investments 2007
962 34 (1,600) (28) (632)
40,000 1,125 40 41,165
730,875 (730,037) 838 206 1,240 $ 1,446 $
579,875 (619,800) (39,925) 1,240 1,240
Net Cash Provided by (Used in) Investing Activities Net Increase in Due from Banks Due from Banks at Beginning of Year Due from Banks at End of Year RECONCILIATION OF (DECREASE) INCREASE IN NET ASSETS TO NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES: (Decrease) Increase in net assets (RCIF-2) Adjustments to reconcile (decrease) increase in net assets to net cash (used in) provided by operating activities: Amortization of discounts/premiums on investments Change in accrued revenue Change in accrued expenses Change in interfund payables Change in advances for grants Change in undisbursed commitments Change in unrealized investment holding gains Translation adjustments Net Cash (Used in) Provided by Operating Activities
(9,229)
33,817
(132) (93) 6 37 (343) 9,171 (57) 8 $ (632) $
(61) 9 7,400 41,165
Annual Report 2008
145
RCIF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 NOTE ANATURE OF OPERATIONS The Regional Cooperation and Integration Fund (RCIF), together with Regional Cooperation and Integration (RCI)Trust Funds, was established on 26 February 2007 under the umbrella of Regional Cooperation and Integration Financing Partnership Facility (RCIFPF), in response to the increasing demand for regional cooperation and integration activities among ADBs member countries in Asia and the Pacific. Its main objective is to enhance regional cooperation and integration in Asia and the Pacific by facilitating the pooling and provision of additional financial and knowledge resources to support RCI activities. Financial assistance will be provided in the form of untied grants for technical assistance (TA), including advisory, project preparatory, and regional TA. RCIFs resources may consist of contributions from ADB and other bilateral, multilateral, and individual sources, including companies and foundations. NOTE BSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation of the Financial Statements The financial statements of the RCIF are presented on the basis of those for not-for-profit organizations. RCIF reports donors contributions of cash and other assets as unrestricted assets as these are made available to RCIF without conditions other than for the purpose of pursuing its objectives. Functional and Reporting Currency The United States dollar is the functional and reporting currency, representing the currency of the primary economic operating environment of RCIF. Translation of Currencies ADB adopts the use of daily exchange rates for accounting and financial reporting purposes. This allows transactions denominated in non-US dollar to be translated to the reporting currency using exchange rates applicable at the time of transactions. Contributions included in the financial statements during the year are recognized at applicable exchange rates as of the respective dates of commitment. At the end of each accounting month, translations of assets, liabilities, and uncommitted balances which are denominated in non-US dollar are adjusted using the applicable rates of exchange at the end of the reporting period. These translation adjustments are accounted for as exchange gains or losses and are credited or charged to operations. Investments All investment securities held by RCIF are reported at estimated fair value, which represents their fair market value. Realized and unrealized gains and losses are included in revenue. Time deposits are reported at cost which is a reasonable estimate of fair value. Interest income on investment securities and time deposits are recognized as realized and reported, net of amortizations of premiums and discounts. Contributions The contributions from donors and allocations from the net income of Ordinary Capital Resources are included in the financial statements, from the date of effectivity of the contributions agreement, and the Board of Governors approval, respectively. Technical Assistance, Grants and Undisbursed Commitments Technical assistance is recognized in the financial statements when the project is approved and becomes effective. Upon completion of the project or cancellation of a technical assistance, any undisbursed amount is written back as a reduction in technical assistance for the year and the corresponding undisbursed commitment is eliminated accordingly. Advances are provided from technical assistance grant funds to the executing agency or co-operating institution, for the purpose of making payments for eligible expenses. The advances shall be subject to liquidation and charged against undisbursed commitment, any unutilized portion shall be refunded to the fund. Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires
146

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 Management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities and uncommitted balances as at the end of the year and the reported amounts of revenue and expenses during the year. The actual results could differ from those estimates. Statement of Cash Flows For the purposes of the Statement of Cash Flows, RCIF considers that its cash and cash equivalents are limited to DUE FROM BANKS. NOTE CINVESTMENTS NOTE E TECHNICAL ASSISTANCE AND UNDISBURSED COMMITMENTS During the year, there were thirteen (four technical assistance (TA) and one supplementary approval 2007) TA grants totaling $10,458,000 ($7,400,000 2007) which became effective. Undisbursed commitments are denominated in United States dollars and represent technical assistance not yet disbursed. The fair value of undisbursed commitments approximates the amounts outstanding, because ADB expects that disbursements will substantially be made for all the projects/programs covered by the commitments. NOTE F CONTRIBUTIONS AND UNCOMMITTED BALANCES In May 2007, the Board of Governors approved the allocation of $40,000,000 to the RCIF from the 2006 OCR net income. Uncommitted balances comprised of amounts which have not been committed by ADB as at 31 December 2008. NOTE GFAIR VALUE MEASUREMENTS FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability at measurement date (exit price) in an orderly transaction among willing participants with an assumption that the transaction takes place in the entitys principal market, the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The fair value measurement is not adjusted for transaction cost. FAS 157 also establishes a fair value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3). FAS 157 requires the fair value measurement to maximize the use of market observable inputs. The following guidelines are applied in determining the fair values of financial instruments:
The main investment management objective is to maintain security and liquidity. Subject to these parameters, ADB seeks the highest possible return on its investments. Investments are governed by the Investment Authority approved by the Board of Directors in 1999, and reviewed in 2006. The review endorsed a portfolio strategy that is largely consistent with the 1999 approach. Investment securities and negotiable certificate of deposits held as of 31 December 2008 are considered Available for Sale and are reported at fair value, which represents their fair market value. Unrealized gains and losses are included in revenue from investments. The annualized rate of return on the average investments held during the period ended 31 December 2008, based on the portfolio held at the beginning and end of each month, was 3.12% (5.31% - 2007). NOTE DRELATED PARTY TRANSACTIONS The OCR and special fund resources are at all times used, committed, and invested entirely separate from each other. Regional technical assistance projects and programs may be combined activities between special and trust funds. The administrative and operational expenses pertaining to RCIF are settled on a regular basis between RCIF and the other funds. As of 31 December 2008, $15,000 (nil-2007) and $22,000 (nil-2007) was payable to OCR and TASF, respectively, which are included in miscellaneous liabilities.
Annual Report 2008
147
RCIF-4

NOTES TO FINANCIAL STATEMENTS 31 December 2008 and 2007 Investments Readily marketable investments are fair valued using active market quotes in Level 1 category. Level 2 category includes investments which are fair valued with significant other market observable inputs. CONTINUED The fair values of the following financial assets of RCIF as of 31 December 2008 were reported based on the following:
Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) $ Significant Other Observable Inputs (Level 2) $39,276,000 Significant Unobservable Inputs (Level 3) $
See Notes C and E for discussions relating to investments and undisbursed commitments. In all other cases, the carrying amount of RCIFs assets, liabilities
and uncommitted balances are considered to approximate fair values for all significant financial instruments.
148
CLIMATE CHANGE FUND

CLIMATE CHANGE FUND
5 March 2009
Annual Report 2008
149
In our opinion, the accompanying statements of financial position and the related statements of activities and changes in net assets and cash flows present fairly, in all material respects, the financial position of the Asian Development Bank (ADB or the Bank)Climate Change Fund at 31 December 2008, and the results of its activities and changes in net assets and its cash flows for the period from 7 April 2008 (establishment of the Fund) to 31 December 2008, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, managements assertion that ADB maintained, effective internal control over financial reporting as of 31 December 2008 is fairly stated, in all material respects, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The management of ADB is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assertion of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on ADBs internal control over financial reporting based on our integrated audit in 2008. We conducted our audits of the financial statements in accordance with auditing standards generally accepted in the United States of America and our audit of internal control over financial reporting in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
CLIMATE CHANGE FUND
150
CLIMATE CHANGE FUND
Annual Report 2008
151
CCF-1
ASIAN DEVELOPMENT BANKCLIMATE CHANGE FUND

STATEMENT OF FINANCIAL POSITION 31 December 2008 Expressed in Thousands of United States Dollars (Note B)
ASSETS DUE FROM BANKS (Note B) INVESTMENTS (Notes B, C, and G) Time deposits Corporate obligations ACCRUED REVENUE TOTAL LIABILITIES AND UNCOMMITTED BALANCES MISCELLANEOUS LIABILITIES (Note D) UNDISBURSED COMMITMENTS (Notes B, E, and G) UNCOMMITTED BALANCES (CCF-2) (Notes B and F), represented by: Unrestricted net assets TOTAL
The accompanying notes are an integral part of these financial statements (CCF-4).
1,564
$ 10,921 27,973
38,894 50 $ 40,508
81 3,000
CLIMATE CHANGE FUND
37,427 $ 40,508
152
CCF-2

STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS For the Period 7 April to 31 December 2008 Expressed in Thousands of United States Dollars (Note B)
CHANGES IN UNRESTRICTED NET ASSETS CONTRIBUTIONS (Notes B and F) REVENUE From investments (Notes B and C) From other sources Total EXPENSES Administrative expenses (Note D) Technical assistance (Note B) Total CONTRIBUTIONS AND REVENUE IN EXCESS OF EXPENSES $ 40,000
545 9 40,554
124 3,000 3,124 37,430 (3) $ 37,427
CLIMATE CHANGE FUND
NET EXCHANGE LOSSES (Note B) NET ASSETS AT END OF PERIOD

The accompanying notes are an integral part of these financial statements (CCF-4).
Annual Report 2008
153
CCF-3

STATEMENT OF CASH FLOWS For the Period 7 April to 31 December 2008 Expressed in Thousands of United States Dollars (Note B)
CASH FLOWS FROM OPERATING ACTIVITIES Contributions received Interest on investments received Administrative expenses paid Cash received from other sources Net Cash Provided by Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Maturities of investments Acquisition of investments Net Cash Used in Investing Activities Due from Banks at End of Period RECONCILIATION OF INCREASE IN NET ASSETS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Increase in net assets (CCF-2) Adjustments to reconcile increase in net assets to net cash provided by operating activities: Amortization of discounts on investments Change in accrued revenue Change in miscellaneous assets Change in miscellaneous liabilities Change in undisbursed commitments Translation adjustments Net Cash Provided by Operating Activities
0 - Less than $500. The accompanying notes are an integral part of these financial statements (CCF-4).
$ 40,000 315 (46) 9 40,278
336,872 (375,586) (38,714) $ 1,564
CLIMATE CHANGE FUND
$ 37,427
(180) (50) (0) 78 3,000 3 $ 40,278
154

NOTES TO FINANCIAL STATEMENTS For the Period 7 April to 31 December 2008 NOTE ANATURE OF OPERATIONS The Climate Change Fund (CCF) was established on 7 April 2008 to facilitate greater investments in developing member countries (DMCs) to address the causes and consequences of climate change alongside ADBs own assistance in various related sectors. The CCF will be a key mechanism to pool resources within ADB to address climate change through (i) technical assistance (TA), (ii) investment components for both private and public sector projects, and (iii) any other form of cooperation that partners and ADB may agree upon for a defined program of activities. Financial assistance will be provided in the form of untied grants for components of investment projects, for advisory, project preparatory, and regional technical assistance (TA); as well as for any other activities that may be agreed between external contributors and ADB. CCFs resources may consist of contributions from ADB and other bilateral, multilateral, and individual sources, including companies and foundations. NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation of the Financial Statements The financial statements of the CCF are presented on the basis of those for not-for-profit organizations. CCF reports donors contributions of cash and other assets as unrestricted assets as these are made available to CCF without conditions other than for the purpose of pursuing its objectives. Functional and Reporting Currency The United States dollar is the functional and reporting currency, representing the currency of the primary economic operating environment of CCF. Translation of Currencies ADB adopts the use of daily exchange rates for accounting and financial reporting purposes. This allows transactions denominated in non-US dollar to be translated to the reporting currency using exchange rates applicable at the time of transactions. Contributions included in the financial statements during the year are recognized at applicable exchange rates as of the respective dates of commitment. At the end of each accounting month, translations of assets, liabilities, and uncommitted balances which are denominated in non-US dollar are adjusted using the applicable rates of exchange at the end of the reporting period. These translation adjustments are accounted for as exchange gains or losses and are credited or charged to operations. Investments All investment securities held by CCF are reported at estimated fair value, which represents their fair market value. Realized and unrealized gains and losses are included in revenue. Time deposits are reported at cost which is a reasonable estimate of fair value. Interest income on investment securities and time deposits are recognized as realized and reported, net of amortizations of premiums and discounts. Contributions The contributions from donors and the allocations from net income of Ordinary Capital Resources are included in the financial statements, from the date of effectivity of the contributions agreement, and the Board of Governors' approval, respectively. Technical Assistance and Undisbursed Commitments Technical assistance is recognized in the financial statements when the project is approved and becomes effective. Upon completion of the project or cancellation of a technical assistance, any undisbursed amount is written back as a reduction in technical assistance for the year and the corresponding undisbursed commitment is eliminated accordingly. Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities and uncommitted balances as at the end of the year and the reported amounts of revenue and expenses during the year. The actual results could differ from those estimates.
CLIMATE CHANGE FUND
Annual Report 2008
155
CCF-4

NOTES TO FINANCIAL STATEMENTS For the Period 7 April to 31 December 2008 Statement of Cash Flows For the purposes of the Statement of Cash Flows, CCF considers that its cash and cash equivalents are limited to DUE FROM BANKS. NOTE CINVESTMENTS The main investment management objective is to maintain security and liquidity. Subject to these parameters, ADB seeks the highest possible return on its investments. Investments are governed by the Investment Authority approved by the Board of Directors in 1999, and reviewed in 2006. The review endorsed a portfolio strategy that is largely consistent with the 1999 approach. Investment securities and negotiable certificate of deposits held as of 31 December 2008 are considered Available for Sale and are reported at fair value, which represents their fair market value. Unrealized gains and losses are included in revenue from investments. Interest on investment securities and time deposits are recognized as realized and reported net of amortizations of premiums and discounts. The annualized rate of return on the average investments held during the period ended 31 December 2008, based on the portfolio held at the beginning and end of each month, was 2.59%. NOTE DRELATED PARTY TRANSACTIONS The OCR and special fund resources are at all times used, committed, and invested entirely separate from each other. The administrative and operational expenses pertaining to CCF are settled on a regular basis between OCR and CCF. As of 31 December 2008, $6,000 was payable to OCR which is included in miscellaneous liabilities. NOTE EUNDISBURSED COMMITMENTS Undisbursed commitments are denominated in United States dollars and represent technical assistance not yet disbursed. The fair value of undisbursed commitments approximates the amounts outstanding, because ADB CONTINUED expects that disbursements will substantially be made for all the projects/programs covered by the commitments. NOTE F CONTRIBUTIONS AND UNCOMMITTED BALANCES In May 2008, the Board of Governors approved the allocation of $40,000,000 to the CCF from the 2007 OCR net income. Uncommitted balances comprised of amounts which have not been committed by ADB as at 31 December 2008. NOTE GFAIR VALUE MEASUREMENTS FAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability at measurement date (exit price) in an orderly transaction among willing participants with an assumption that the transaction takes place in the entitys principal market, the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The fair value measurement is not adjusted for transaction cost. FAS 157 also establishes a fair value hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3). FAS 157 requires the fair value measurement to maximize the use of market observable inputs. The following guidelines are applied in determining the fair values of financial instruments: Investments Readily marketable investments are fair valued using active market quotes in Level 1 category. Level 2 category includes investments which are fair valued with significant other market observable inputs.
CLIMATE CHANGE FUND
156
CCF-4

NOTES TO FINANCIAL STATEMENTS For the Period 7 April to 31 December 2008 The fair value of the following financial assets of CCF as of 31 December 2008 were reported based on the following:
31 December 2008 Assets Investments
$38,894,000
$38,894,000
CLIMATE CHANGE FUND
See Notes C and E for discussions relating to investments and undisbursed commitments. In all other cases, the carrying amount of CCFs assets, liabilities and
158
STATISTICAL ANNEXES
Annual Report 2008
157
STATISTICAL ANNEXES
STATISTICAL ANNEXES
Annual Report 2008
159
Statistical Annex 1 SOVEREIGN AND NONSOVEREIGN LOAN APPROVALS BY COUNTRY, 2008 ($ million)
OCR SOVEREIGN Armenia Rural Road Sector (Supplementary) Subtotal Azerbaijan Road Network Development Program Tranche 2 Power Transmission Enhancement Subtotal Bangladesh Emergency Disaster Damage Rehabilitation (Sector) Skills Development Emergency Assistance for Food Security Public-Private Infrastructure Development Facility Second Urban Governance and Infrastructure Improvement (Sector) Subtotal Bhutan Green Power Development Subtotal Cambodia Road Asset Management Emergency Food Assistance Financial Sector Program II Cluster (Subprogram 2) Promoting Economic Diversification Program (Subprogram 1) Subtotal China, Peoples Republic of Gansu Baiyin Urban Development Gansu Heihe Rural Hydropower Development Investment Program Tranche 2: Dagushan Hydropower Project Xinjiang Municipal Infrastructure and Environmental Improvement Guangdong Energy Efficiency and Environment Improvement Investment Program Tranche 1 Integrated Ecosystem and Water Resources Management in the Baiyangdian Basin Ningxia Integrated Ecosystem and Agricultural Development Central Yunnan Roads Development LanzhouChongqing Railway Development Dryland Sustainable Agriculture ChongqingLichuan Railway Development Songhua River Basin Water Pollution Control and Management Guangxi Wuzhou Urban Development Qingdao Water Resources and Wetland Protection Subtotal 55.40 160.00 215.40 55.40 160.00 215.40 73.90 240.00 313.90 22 Aug 10 Sep ADF Total Total Project Costa Date Approved
17.32 17.32
17.32 17.32
23.44 23.44
7 Nov
82.00 82.00
120.00 50.00 170.00 83.00 87.00 510.00
120.00 50.00 170.00 165.00 87.00 592.00
220.00 66.70 1,293.00 925.00 167.50 2,672.20
31 Jan 6 Jun 22 Jul 2 Oct 28 Oct
51.00 51.00
29.00 29.00
80.00 80.00
234.45 234.45
29 Oct
STATISTICAL ANNEXES
6.00 17.50 10.30 20.00 53.80
6.00 17.50 10.30 20.00 53.80
58.35 40.08 10.30 22.00 130.73
21 Jan 2 Oct 5 Dec 5 Dec
80.00 28.00 105.00 35.00 100.00 100.00 200.00 300.00 83.00 150.00 200.00 100.00 45.00 1,526.00
80.00 28.00 105.00 35.00 100.00 100.00 200.00 300.00 83.00 150.00 200.00 100.00 45.00 1,526.00
161.53 61.92 190.90 50.00 273.38 221.02 745.00 8,608.90 204.69 3,071.10 396.33 263.40 105.80 14,353.96
23 Jan 28 Jan 23 Apr 9 Jun 24 Jun 29 Aug 25 Sep 18 Nov 25 Nov 8 Dec 11 Dec 15 Dec 17 Dec
= nil, ADF = Asian Development Fund, OCR = ordinary capital resources. a Total project cost includes financing by ADB, governments, beneficiaries, and subborrowers; cofinancing from official, export credit, and commercial sources; equity sponsors; and local participating private companies and financial institutions.
160
CONTINUED
Total Project Costa Date Approved
OCR Cook Islands Avatiu Port Development Subtotal Georgia Municipal Services Development Emergency Assistance for Post-Conflict Recovery Subtotal India Uttarakhand Urban Sector Development Investment Program Tranche 1 Rural Roads Sector II Investment Program Tranche 2 National Power Grid Development Investment Program Tranche 1 Assam Governance and Public Resource Management Sector Development Program (Subprogram II) Bihar State Highways Orissa Integrated Irrigated Agriculture and Water Management Investment Program Tranche 1 Rural Roads Sector II Investment Program Tranche 3 Khadi Reform and Development Program Urban Water Supply and Environmental Improvement in Madhya Pradesh (Supplementary) Uttarakhand State-Road Investment Program Tranche 2 Himachal Pradesh Clean Energy Development Investment Program Tranche 1 Uttarakhand Power Sector Investment Program Tranche 2 Subtotal Indonesia Vocational Education Strengthening Rural Infrastructure Support to PNPM Mandiri Infrastructure Reform Sector Development Program (Subprogram 2) Second Local Government Finance and Governance Reform Program Cluster (Subprogram 1) Fourth Development Policy Support Program Integrated Citarum Water Resources Management Investment Program Tranche 1 Subtotal Kazakhstan CAREC Transport Corridor I (Zhambyl Oblast Section) [Western EuropeWestern Peoples Republic of China International Transit Corridor] Investment Program Tranche 1 Subtotal Maldives Private Sector Development Subtotal
ADF
Total
8.63 8.63
6.88 6.88
15.51 15.51
18.19 18.19
20 Nov
40.00 70.00 110.00
40.00 70.00 110.00
63.25 70.00 133.25
12 Sep 12 Nov
60.00 77.65 400.00 100.00 420.00 47.20 130.00 150.00 71.00 140.00 150.00 62.40 1,808.25
60.00 77.65 400.00 100.00 420.00 47.20 130.00 150.00 71.00 140.00 150.00 62.40 1,808.25
85.70 100.46 429.42 100.00 468.00 67.50 168.80 150.00 108.00 200.00 224.80 89.14 2,191.82
1 Feb 17 Mar 28 Mar 17 Sep 18 Sep 26 Sep 26 Sep 2 Oct 13 Oct 22 Oct 27 Oct 23 Dec
STATISTICAL ANNEXES
280.00 350.00 200.00 20.00 850.00
80.00 50.00 30.00 160.00
80.00 50.00 280.00 350.00 200.00 50.00 1,010.00
115.00 62.50 280.00 350.00 200.00 88.63 1,096.13
31 Mar 29 Sep 27 Nov 4 Dec 16 Dec 22 Dec
340.00 340.00
340.00 340.00
400.00 400.00
30 Dec
7.50 7.50
7.50 7.50
7.80 7.80
20 Jun
= nil, ADF = Asian Development Fund, CAREC = Central Asia Regional Economic Cooperation, OCR = ordinary capital resources, PNPM = Program Nasional Pemberdayaan Masyarakat (National Program for Community Empowerment). a Total project cost includes financing by ADB, governments, beneficiaries, and subborrowers; cofinancing from official, export credit, and commercial sources; equity sponsors; and local participating private companies and financial institutions.
Annual Report 2008
161
OCR Pakistan Barani Integrated Water Resources Sector Preparing the Lahore Rapid Mass Transit System Power Distribution Enhancement Investment Program Tranche 1 Accelerating Economic Transformation Program (Subprogram 1) Second Balochistan Resource Management Program (Subprogram 1) Sindh Growth and Rural Revitalization Program (Subprogram 1) Punjab Millennium Development Goals Program (Subprogram 1) Sindh Cities Improvement Investment Program Tranche 1 Subtotal Papua New Guinea Highlands Region Road Improvement Investment Program Tranche 1b Subtotal Philippines Development Policy Support Program (Subprogram 2) Agrarian Reform Communities Project II Governance in Justice Sector Reform Program (Subprogram 1) Subtotal Samoa Sanitation and Drainage (Supplementary) Subtotal Sri Lanka Southern Transport Development (Supplementary) Dry Zone Urban Water and Sanitation Subtotal Uzbekistan Surkhandarya Water Supply and Sanitation Water Resources Management Sector Subtotal Viet Nam Song Bung 4 Hydropower Ho Chi Minh CityLong ThanhDau Giay Expressway Construction Greater Mekong Subregion Sustainable Tourism Development Greater Mekong Subregion: Ha NoiLang Son, Greater Mekong Subregion: Ha LongMong Cai, and Ben Luc-Long Thanh Expressways Technical Assistance Health Care in the South Central Coast Region Emergency Rehabilitation of Calamity Damage (Supplementary) Support for the Implementation of the Poverty Reduction Program V (Subprogram 1) Subtotal Total Sovereign
ADF
Total
Total Project Costa
Date Approved
55.00 242.00 300.00 45.00 642.00
20.00 6.00 10.00 200.00 55.00 100.00 100.00 38.00 529.00
75.00 6.00 252.00 500.00 100.00 100.00 100.00 38.00 1,171.00
104.50 7.50 327.00 500.00 100.00 100.00 100.00 50.00 1,289.00
3 Mar 4 Jun 12 Sep 30 Sep 11 Dec 11 Dec 11 Dec 19 Dec
100.00 100.00
100.00 100.00
140.00 140.00
22 Dec
250.00 70.00 300.00 620.00
250.00 70.00 300.00 620.00
250.00 208.40 300.00 758.40
30 Sep 27 Oct 16 Dec
2.78 2.78
2.78 2.78
7.81 7.81
12 Sep
STATISTICAL ANNEXES
90.00 90.00
59.78 59.78
90.00 59.78 149.78
179.10 113.33 292.43
6 Mar 28 Nov
85.00 85.00
30.00 15.00 45.00
30.00 100.00 130.00
40.00 148.00 188.00
3 Nov 17 Dec
196.00 410.20
10.00
196.00 410.20 10.00
267.30 932.40 11.11
26 Jun 30 Sep 15 Oct
606.20 6,924.48
26.00 72.00 25.50 25.00 158.50 1,789.56
26.00 72.00 25.50 25.00 764.70 8,714.04
30.80 80.00 30.00 32.14 1,383.75 25,635.26
23 Oct 7 Nov 8 Dec 8 Dec
= nil, ADF = Asian Development Fund, OCR = ordinary capital resources. a Total project cost includes financing by ADB, governments, beneficiaries, and subborrowers; cofinancing from official, export credit, and commercial sources; equity sponsors; and local participating private companies and financial institutions. b Consists of two ADF loans.
162
CONTINUED
Total Project Costa Date Approved
OCR NONSOVEREIGN Afghanistan Roshan Expansion (Phase III) Subtotal China, Peoples Republic of Municipal District Energy Infrastructure Development Inner Mongolia Wind Power Subtotal India Gujarat Paguthan Wind Energy Financing Facility (Samana Phase I) Mundra Ultra Mega Power CLP Wind Farms Private Limited (Samana Phase II and the Saundatti Project) GTL Infrastructure Limited Phase II Telecommunication Infrastructure National Highway 1 PanipatJalandhar Toll Road Columbia Asia Hospitals Development Rural Electrification Corporation of India Subtotal Indonesia Bank Mandiri (Persero) Subtotal Maldives Housing Development Finance Corporation Subtotal Philippines Acquisition and Rehabilitation of the Masinloc Coal-Fired Thermal Power Plant Privatization and Refurbishment of the Calaca Coal-Fired Thermal Power Plant Subtotal Viet Nam Saigon Thuong Tin Bank (Sacombank) Subtotal Total Nonsovereign TOTAL
ADF
Total
60.00 60.00
60.00 60.00
175.00 175.00
29 Jul
200.00 24.08 224.08
200.00 24.08 224.08
1,285.14 73.42 1,358.56
2 Jun 4 Sep
45.00 450.00 60.00 150.00 100.00 38.64 225.00 1,068.64
45.00 450.00 60.00 150.00 100.00 38.64 225.00 1,068.64
67.64 4,226.75 169.13 1,184.54 1,067.00 154.55 225.00 7,094.61
17 Apr 17 Apr 17 Apr 23 May 23 Oct 10 Nov 27 Nov
STATISTICAL ANNEXES
75.00 75.00
75.00 75.00
300.00 300.00
29 Jul
7.50 7.50
7.50 7.50
33.00 33.00
9 Apr
200.00 120.00 320.00
200.00 120.00 320.00
1,100.00 890.00 1,990.00
15 Jan 2 Jun
25.00 25.00 1,780.23 8,704.71
1,789.56
25.00 25.00 1,780.23 10,494.27
25.00 25.00 10,976.18 36,611.44
10 Dec
= nil, ADF = Asian Development Fund, OCR = ordinary capital resources. a Total project cost includes financing by ADB, governments, beneficiaries, and subborrowers; cofinancing from official, export credit, and commercial sources; equity sponsors; and local participating private companies and financial institutions.
Annual Report 2008
163
Statistical Annex 2 GRANT-FINANCED PROJECT APPROVALS BY COUNTRY, 2008 ($ million)

ADF Afghanistan Agriculture Market Infrastructure Development of Mini Hydropower Plants in Badakhshan and Bamyan Provinces Energy Sector Development Investment Program Tranche 1 Road Network Development Investment Program Tranche 1 Subtotal Bangladesh Emergency Disaster Damage Rehabilitation (Sector)a Post-Literacy and Continuing Education (Supplementary)a Skills Developmenta Subtotal Bhutan Green Power Developmenta Green Power Developmenta Subtotal Cambodia Road Asset Managementa Health Sector Support (Supplementary)a Emergency Food Assistancea Public Financial Management for Rural Development Program (Subprogram 1) Public Financial Management for Rural Development Project Capacity Development in Sanitary and Phytosanitary Standards Management Systemsa Subtotal China, Peoples Republic of Capacity Building for Energy Efficiency Implementation Ningxia Integrated Ecosystem and Agricultural Developmenta Dryland Sustainable Agriculturea Subtotal Kyrgyz Republic Southern Agriculture Area Development (Supplementary)a Investment Climate Improvement Program (Subprogram 1) Investment Climate Improvement Program System Support Project Community-Based Infrastructure Services Sector CAREC Transport Corridor 1 (BishkekTorugart Road) Subtotal Lao Peoples Democratic Republic Alternative Livelihood for Upland Ethnic Groups in Houaphanh Province Greater Mekong Subregion Sustainable Tourism Developmenta Subtotal Micronesia, Federated States of Weno Water Supply Well Remediation Subtotal Mongolia Western Regional Road Corridor Development Phase I Community-Based Local Road Upgrading and Maintenance in the Western Region of Mongolia Water Point and Extension Station Establishment for Poor Herding Families Poverty Reduction through Community-Based Natural Resource Management Energy Conservation and Emissions Reduction from Poor Households Agriculture and Rural Development Other Sourcesa Total Date Approved
30.00 164.00 60.00 254.00 25.28 25.28 17.50 6.71 4.10 2.00 30.31 12.50 2.90 30.00 20.00 65.40 10.00 10.00 37.60 14.72
12.00 JFPR 12.00 10.00 Canada 2.50 Switzerland 6.00 Switzerland 18.50 1.00 ACEF-CEFPF 1.00 4.80 Australia 1.80 United Kingdom 6.60 0.80 CEF-CEFPF 4.55 GEF 0.35 Spain 5.70 2.50 GEF 2.50 1.82 JFPR 1.82 0.98 JFPR 0.98 2.00 2.00 2.00 2.00 JFPR JFPR JFPR JFPR
30.00 12.00 164.00 60.00 266.00 10.00 2.50 6.00 18.50 25.28 1.00 26.28 4.80 1.80 17.50 6.71 4.10 2.00 36.91 0.80 4.55 0.35 5.70 2.50 12.50 2.90 30.00 20.00 67.90 1.82 10.00 11.82 0.98 0.98 37.60 2.00 2.00 2.00 2.00 14.72
21 Nov 28 Nov 2 Dec 2 Dec
28 Mar 1 Jul 17 Dec
29 Oct 26 Dec
21 Jan 31 Mar 2 Oct 4 Dec 4 Dec 5 Dec
STATISTICAL ANNEXES
4 Jun 29 Aug 25 Nov
15 May 3 Nov 3 Nov 3 Nov 14 Nov
13 Feb 15 Oct
17 Jul
26 Feb 10 Jul 30 Jul 5 Aug 23 Sep 29 Sep
= nil, ACEF-CEFPF = Asian Clean Energy Fund (Japan) under the Clean Energy Financing Partnership Facility, ADF = Asian Development Fund, CAREC = Central Asia Regional Economic Cooperation, CEF-CEFPF = Clean Energy Fund under the Clean Energy Financing Partnership Facility, GEF = Global Environment Facility, JFPR = Japan Fund for Poverty Reduction. a Grant component of a loan project.
164
CONTINUED
Other Sourcesa 8.00 20.00 United Kingdom 20.00 1.00 JFPR 1.00 0.47 Australia 5.25 EC 5.72 2.00 JFPR 2.00 NET-WFPF 4.00 3.50 GEF 3.00 JFPR 6.50 3.00 GEF 1.50 MDTF-WFPF 4.50 1.90 JFPR 2.00 JFPR 1.30 JFPR 5.20 104.01 Date Approved 21 Nov 10 Dec 10 Dec
ADF Education Sector Reform Food and Nutrition Social Welfare Program Food and Nutrition Social Welfare Capacity Development Project Subtotal Nepal Education Sector Program Cluster (Subprogram II) Information and Communication Technology Development Governance Support Program (Subprogram 1) Rural Reconstruction and Rehabilitation Sector Development Project (Supplementary) Subtotal Philippines Developing Microinsurance Subtotal Samoa Sanitation and Drainagea Subtotal Solomon Islands Road Improvement Sector (Supplementary) Domestic Maritime Support (Sector) Subtotal Sri Lanka Improvement of Rural Access Roads and Livelihood Development for the Poor Dry Zone Urban Water and Sanitationa Subtotal Tajikistan Rural Development (Supplementary)a Community Participatory Flood Management Nurek 500 kV Switchyard Reconstruction Subtotal Tonga Integrated Urban Development Sector Subtotal Tuvalu Improved Financial Management Program Subtotal Uzbekistan Land Improvementa Surkhandarya Water Supply and Sanitationa Subtotal Viet Nam Community-Based Early Childhood Care and Development Livelihood Improvement of Vulnerable Ethnic Minority Communities Affected by the Song Bung 4 Hydropower Project in Quang Nam Provincea Demand-Driven Skills Training for Poverty Reduction in the Cuu Long (Mekong) River Delta Subtotal TOTAL 10.00 9.00 3.00 74.32 8.00 25.00 106.30 139.30 2.22 2.22 14.00 14.00 23.22 23.22 54.77 54.77 11.30 11.30 3.24 3.24 707.36
Total 10.00 9.00 3.00 82.32 8.00 25.00 106.30 20.00 159.30 1.00 1.00 2.22 2.22 0.47 19.25 19.72 2.00 25.22 27.22 3.50 3.00 54.77 61.27 11.30 11.30 3.24 3.24 3.00 1.50 4.50 1.90 2.00 1.30 5.20 811.37
24 Jan 28 Jan 22 Oct 11 Nov
15 Feb
12 Sep
30 Apr 25 Nov
STATISTICAL ANNEXES
21 Jan 28 Nov
15 May 8 Sep 17 Nov
27 May
16 Dec
09 Jan 3 Nov
19 Feb 26 Jun 18 Jul
= nil, ADF = Asian Development Fund, EC = European Commission, GEF = Global Environment Facility, JFPR = Japan Fund for Poverty Reduction, MDTF-WFPF = Multidonor Trust Fund under the Water Financing Partnership Facility, NET-WFPF = The Netherlands Trust Fund for the Water Financing Partnership Facility. a Grant component of a loan project.
Annual Report 2008
165
Statistical Annex 3 LOAN APPROVALS BY SECTOR: 3-YEAR MOVING AVERAGES, 1968-19702006-2008

Health, Nutrition, and Social Protection Law, Economic Transport Management, and Industry and Public Commuand Trade Policy nications Water Supply, Sanitation, and Waste MultiManagement sector
Total Lendinga ($ million) Average during 19681970 19691971 19701972 19711973 19721974 19731975 19741976 19751977 19761978 19771979 19781980 19791981 19801982 19811983 19821984 19831985 19841986 19851987 19861988 19871989 19881990 19891991 19901992 19911993 19921994 19931995 19941996 19951997 19961998 19971999 19982000 19992001 20002002 20012003 20022004 20032005 20042006 20052007 20062008 Cumulativea (19682008) 128.44 199.25 271.92 330.53 428.42 543.15 661.29 774.22 940.36 1,098.92 1,282.01 1,454.96 1,598.97 1,751.46 1,937.03 1,978.52 2,013.77 2,081.84 2,512.17 3,053.72 3,564.93 4,115.49 4,610.39 5,022.89 4,665.65 4,791.51 4,806.49 6,718.17 6,883.72 6,776.72 5,499.56 5,284.95 5,526.40 5,693.81 5,593.92 5,628.15 6,021.31 7,663.50 9,241.38
Agriculture and Natural Resources Education
Energy
Finance
(percent of total lending) 18.32 19.16 13.86 12.72 14.17 16.57 17.48 17.85 17.56 19.65 22.81 24.70 29.52 31.78 34.36 31.63 32.17 27.37 22.78 19.80 22.53 22.51 18.03 11.37 9.19 10.83 14.06 10.34 7.34 5.50 7.77 10.68 10.94 9.03 6.53 5.28 7.20 5.43 5.01 0.78 0.50 0.82 1.02 0.79 1.28 0.73 1.49 2.95 5.13 5.56 5.35 4.41 5.19 5.34 5.27 4.95 3.97 5.20 4.97 6.33 5.25 5.00 5.18 4.90 5.74 5.64 6.71 5.46 4.64 4.01 4.96 5.35 4.10 4.29 2.93 3.25 1.97 1.90 11.98 25.38 33.06 32.18 26.71 23.03 20.74 21.50 21.11 22.84 23.74 26.21 27.61 26.60 28.98 24.63 25.26 17.47 18.76 16.07 20.48 25.79 28.91 31.01 29.63 31.66 27.54 18.66 11.67 9.76 13.94 15.92 17.02 14.27 14.79 15.03 17.03 16.41 18.61 14.27 13.45 10.71 11.29 12.73 13.35 14.67 13.09 11.01 9.54 7.71 7.29 6.04 6.61 4.09 4.48 3.82 7.80 8.07 12.42 11.10 9.55 7.96 6.60 6.11 5.61 6.15 30.08 34.80 34.15 12.54 3.60 8.60 7.44 7.63 3.83 11.82 13.32 10.52 1.36 1.17 1.41 1.72 2.01 2.91 1.88 2.42 2.02 2.19 1.60 1.91 1.35 1.43 1.14 1.26 1.56 1.13 1.65 1.70 5.50 6.76 8.09 3.58 1.58 1.35 2.65 2.74 1.83 0.47 0.94 24.92 15.89 9.95 7.68 8.46 16.03 14.53 12.17 10.16 9.55 8.42 9.21 7.43 8.00 4.05 3.75 2.23 7.53 12.68 12.30 7.43 6.67 6.40 8.48 5.08 3.58 1.52 1.29 1.19 1.97 4.64 5.02 3.83 2.61 3.03 2.30 1.01 0.37 0.82 $ million 143,528.39 17,063.03 6,023.83 28,502.50 16,690.00 3,292.22 5,715.04 7,741.44 35,115.60 7,311.66 16,073.08 0.09 0.09 0.09 1.77 1.84 2.02 4.38 5.30 10.96 9.51 10.40 8.65 9.84 8.76 9.47 12.06 24.03 21.68 21.48 23.88 21.32 17.68 16.61 16.97 15.98 12.10 12.39 9.41 11.53 7.52 12.12 12.75 14.40 20.54 23.12 23.47 20.68 17.93 20.60 23.46 29.31 26.79 25.64 16.33 18.49 16.84 23.49 23.99 27.04 33.23 37.43 37.50 28.71 30.80 29.19 5.32 3.70 9.93 11.23 13.33 9.16 9.06 8.43 8.97 8.71 8.05 7.67 5.87 6.87 5.94 8.36 6.02 4.75 1.47 3.42 3.38 3.09 2.04 3.07 4.43 6.34 5.63 5.21 3.87 4.92 4.64 4.22 2.98 5.33 4.99 7.49 7.12 7.24 5.22 0.38 0.25 0.18 2.49 2.89 6.18 8.51 10.90 11.31 9.93 8.45 5.59 4.52 3.25 6.71 9.11 8.38 6.32 5.65 6.71 7.77 9.91 9.47 9.70 8.22 10.39 7.85 9.67 11.08 15.58 17.07 13.15 12.24 10.01 13.05 13.26 14.52 15.71
STATISTICAL ANNEXES
= nil. a Totals may not add because of rounding.
166
Statistical Annex 4 LOAN APPROVALS BY SECTOR, 2008

$ Million OCR AGRICULTURE AND NATURAL RESOURCES CAM Emergency Food Assistance IND Orissa Integrated Irrigated Agriculture and Water Management Investment Program Tranche 1 PHI Agrarian Reform Communities Project II PRC Ningxia Integrated Ecosystem and Agricultural Development PRC Dryland Sustainable Agriculture UZB Water Resources Management Sector VIE Emergency Rehabilitation of Calamity Damage (Supplementary) Subtotal EDUCATION BAN Skills Development INO Vocational Education Strengthening Subtotal ENERGY AZE BHU IND IND IND ADF Total
47.20 70.00 100.00 83.00 85.00 385.20
17.50 15.00 25.50 58.00
17.50 47.20 70.00 100.00 83.00 100.00 25.50 443.20
50.00 80.00 130.00
50.00 80.00 130.00
STATISTICAL ANNEXES
IND IND IND PAK PHI PHI PRC PRC PRC PRC VIE
Power Transmission Enhancement Green Power Development Gujarat Paguthan Wind Energy Financing Facilitya (Samana Phase I) Mundra Ultra Mega Powera CLP Wind Farms Private Limiteda (Samana Phase II and the Saundatti Project) National Power Grid Development Investment Program Tranche 1 Himachal Pradesh Clean Energy Development Investment Program Tranche 1 Uttarakhand Power Sector Investment Program Tranche 1 Power Distribution Enhancement Investment Program Tranche 1 Acquisition and Rehabilitation of the Masinloc Coal-Fired Thermal Power Planta Privatization and Refurbishment of the Calaca Coal-Fired Thermal Power Planta Municipal District Energy Infrastructure Developmenta Inner Mongolia Wind Powera Gansu Heihe Rural Hydropower Development Investment Program Tranche 2: Dagushan Hydropower Guangdong Energy Efficiency and Environment Improvement Investment Program Tranche 1 Song Bung 4 Hydropower Subtotal
160.00 51.00 45.00 450.00 60.00 400.00 150.00 62.40 242.00 200.00 120.00 200.00 24.08 28.00 35.00 196.00 2,423.48
29.00 10.00 39.00
160.00 80.00 45.00 450.00 60.00 400.00 150.00 62.40 252.00 200.00 120.00 200.00 24.08 28.00 35.00 196.00 2,462.48
FINANCE CAM INO MLD VIE
Financial Sector Program II Cluster (Subprogram 2) Bank Mandiri (Persero)a Housing Development Finance Corporationa Saigon Thuong Tin Bank (Sacombank)a Subtotal
75.00 7.50 25.00 107.50
10.30 10.30
10.30 75.00 7.50 25.00 117.80
HEALTH, IND PAK VIE
NUTRITION, AND SOCIAL PROTECTION Columbia Asia Hospitals Developmenta Punjab Millennium Development Goals Program (Subprogram 1) Health Care in the South Central Coast Region Subtotal
38.64 38.64
100.00 72.00 172.00
38.64 100.00 72.00 210.64
= nil, ADF = Asian Development Fund, AZE = Azerbaijan, BAN = Bangladesh, BHU = Bhutan, CAM = Cambodia, IND = India, INO = Indonesia, MLD = Maldives, OCR = ordinary capital resources, PAK = Pakistan, PHI = Philippines, PRC = Peoples Republic of China, UZB = Uzbekistan, VIE = Viet Nam. a Nonsovereign Loan.
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CONTINUED
$ Million OCR INDUSTRY AND TRADE IND Khadi Reform and Development Program MLD Private Sector Development VIE Greater Mekong Subregion Sustainable Tourism Development Subtotal LAW, ECONOMIC MANAGEMENT, AND PUBLIC POLICY CAM Promoting Economic Diversification Program (Subprogram 1) IND Assam Governance and Public Resource Management Sector Development Program (Subprogram II) INO Second Local Government Finance and Governance Reform Program Cluster (Subprogram 1) INO Fourth Development Policy Support Program PAK Accelerating Economic Transformation Program (Subprogram 1) PAK Second Balochistan Resource Management Program (Subprogram 1) PAK Sindh Growth and Rural Revitalization Program (Subprogram 1) PHI Development Policy Support Program (Subprogram 2) PHI Governance in Justice Sector Reform Program (Subprogram 1) VIE Support for the Implementation of the Poverty Reduction Program V (Subprogam 1) Subtotal TRANSPORT AND COMMUNICATIONS ARM Rural Road Sector (Supplementary) AZE Road Network Development Program Tranche 2 CAM Road Asset Management COO Avatiu Port Development IND GTL Infrastructure Limited Phase II Telecommunication Infrastructurea IND National Highway 1 Panipat-Jalandhar Toll Roada IND Rural Roads Sector II Investment Program Tranche 2 IND Bihar State Highways IND Rural Roads Sector II Investment Program Tranche 3 IND Uttarakhand State-Road Investment Program Tranche 2 KAZ CAREC Transport Corridor I (Zhambyl Oblast Section) [Western EuropeWestern Peoples Republic of China International Transit Corridor] Investment Program Tranche 1 PAK Preparing the Lahore Rapid Mass Transit System PNG Highlands Region Road Improvement Investment Program Tranche 1b PRC Central Yunnan Roads Development PRC LanzhouChongqing Railway Development PRC ChongqingLichuan Railway Development SRI Southern Transport Development (Supplementary) VIE Ho Chi Minh CityLong ThanhDau Giay Expressway Construction VIE Greater Mekong Subregion: Ha NoiLang Son, Greater Mekong Subregion: Ha Long-Mong Cai, and Ben LucLong Thanh Expressways Technical Assistance Subtotal ADF Total
150.00 150.00
7.50 10.00 17.50
150.00 7.50 10.00 167.50
100.00 350.00 200.00 300.00 45.00 250.00 300.00 1,545.00
20.00 200.00 55.00 100.00 25.00 400.00
20.00 100.00 350.00 200.00 500.00 100.00 100.00 250.00 300.00 25.00 1,945.00
55.40 8.63 150.00 100.00 77.65 420.00 130.00 140.00
17.32 6.00 6.88
17.32 55.40 6.00 15.51 150.00 100.00 77.65 420.00 130.00 140.00
STATISTICAL ANNEXES
340.00 200.00 300.00 150.00 90.00 410.20 2,571.88
6.00 100.00 26.00 162.20
340.00 6.00 100.00 200.00 300.00 150.00 90.00 410.20 26.00 2,734.08
= nil, ADF = Asian Development Fund, ARM = Armenia, AZE = Azerbaijan, CAM = Cambodia, CAREC = Central Asia Regional Economic Cooperation, COO = Cook Islands, IND = India, INO = Indonesia, KAZ = Kazakhstan, MLD = Maldives, OCR = ordinary capital resources, PAK = Pakistan, PHI = Philippines, PNG = Papua New Guinea, PRC = Peoples Republic of China, SRI = Sri Lanka, VIE = Viet Nam. a Nonsovereign Loan. b Consists of two ADF loans.
168
CONTINUED
$ Million OCR WATER SUPPY, SANITATION, AND WASTE MANAGEMENT IND Urban Water Supply and Environmental Improvement in Madhya Pradesh (Supplementary) PAK Sindh Cities Improvement Investment Program Tranche 1 PRC Songhua River Basin Water Pollution Control and Management SAM Sanitation and Drainage (Supplementary) SRI Dry Zone Urban Water and Sanitation UZB Surkhandarya Water Supply and Sanitation Subtotal MULTISECTOR AFG Roshan Expansion (Phase III)a BAN Emergency Disaster Damage Rehabilitation (Sector) BAN Emergency Assistance for Food Security BAN Public-Private Infrastructure Development Facility BAN Second Urban Governance and Infrastructure Improvement (Sector) GEO Municipal Services Development GEO Emergency Assistance for Post-Conflict Recovery IND Uttarakhand Urban Sector Development Investment Program Tranche 1 IND Rural Electrification Corporation of Indiaa INO Rural Infrastructure Support to PNPM Mandiri INO Infrastructure Reform Sector Development Program (Subprogram 2) INO Integrated Citarum Water Resources Management Investment Program Tranche 1 PAK Barani Integrated Water Resources Sector PRC Gansu Baiyin Urban Development PRC Xinjiang Municipal Infrastructure and Environmental Improvement PRC Integrated Ecosystem and Water Resources Management in the Baiyangdian Basin PRC Guangxi Wuzhou Urban Development PRC Qingdao Water Resources and Wetland Protection Subtotal TOTAL ADF Total
71.00 200.00 271.00
38.00 2.78 59.78 30.00 130.56
71.00 38.00 200.00 2.78 59.78 30.00 401.56
STATISTICAL ANNEXES
60.00 82.00 60.00 225.00 280.00 20.00 55.00 80.00 105.00 100.00 100.00 45.00 1,212.00 8,704.71
120.00 170.00 83.00 87.00 40.00 70.00 50.00 30.00 20.00 670.00 1,789.56
60.00 120.00 170.00 165.00 87.00 40.00 70.00 60.00 225.00 50.00 280.00 50.00 75.00 80.00 105.00 100.00 100.00 45.00 1,882.00 10,494.27
= nil, ADF = Asian Development Fund, AFG = Afghanistan, BAN = Bangladesh, GEO = Georgia, IND = India, INO = Indonesia, OCR = ordinary capital resources, PAK = Pakistan, PNPM = Program Nasional Pemberdayaan Masyarakat (National Program for Community Empowerment), PRC = Peoples Republic of China, SAM = Samoa, SRI = Sri Lanka, UZB = Uzbekistan. a Nonsovereign loan.
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Statistical Annex 5 SECTORAL DISTRIBUTION OF LOANS,a 2008, 19672008

2008 Loans OCR Sector Agriculture and Natural Resources Education Energy Finance Health, Nutrition, and Social Protection Industry and Trade Law, Economic Management, and Public Policy Transport and Communications Water Supply, Sanitation, and Waste Management Multisector TOTALc No. of Loans 5 16 3 1 1 7 14 2 12 61 $ Million 385.2 2,423.5 107.5 38.6 150.0 1,545.0 2,571.9 271.0 1,212.0 8,704.7 No. of Loans 3 2 2 1 2 2 5 7 4 9 37 ADF $ Million 58.0 130.0 39.0 10.3 172.0 17.5 400.0 162.2 130.6 670.0 1,789.6 No. of Projectsb 7 2 15 4 3 3 10 18 6 18 86 Total $ Million 443.2 130.0 2,462.5 117.8 210.6 167.5 1,945.0 2,734.1 401.6 1,882.0 10,494.3 Cumulative as of 2008 No. of Projectsb 453 143 317 185 62 151 56 378 155 247 2,147 $ Million 17,063.0 6,023.8 28,502.5 16,690.0 3,292.2 5,715.0 7,741.4 35,115.6 7,311.7 16,073.1 143,528.4 % 12 4 20 12 2 4 5 24 5 11 100
SECTORAL DISTRIBUTION OF GRANTSd, 2008, 19672008

2008 Grants ADF No. of Grants Agriculture and Natural Resources Education Energy Finance Health, Nutrition, and Social Protection Industry and Trade Law, Economic Management, and Public Policy Transport and Communications Water Supply, Sanitation, and Waste Management Multisector TOTALc
a b c d e
STATISTICAL ANNEXES
Other Sources No. of Grants 9 3 4 1 2 4 3 4 30 $ Million 22.9 9.8 15.8 1.0 3.7 12.5 4.5 33.8 104.0 No. of Projectse 12 5 5 1 3 1 4 7 5 6 49
Total $ Million 85.1 27.8 259.9 1.0 15.7 10.0 122.4 169.1 59.9 60.5 811.4
Cumulative as of 2008 No. of Projectse 57 30 15 13 37 7 16 27 15 46 263 $ Million 461.6 631.9 328.7 86.8 262.0 30.5 226.3 705.8 103.6 1,247.3 4,084.5 % 11 15 8 2 6 1 6 17 3 31 100
$ Million 62.2 18.0 244.1 12.0 10.0 122.4 156.6 55.4 26.7 707.4
3 2 3 2 1 5 5 3 3 27
= nil, ADF = Asian Development Fund, OCR = ordinary capital resources. Includes count for an earlier approved loan with supplementary financing in the current year. A project with multiple loans is counted as one project. Totals may not add up because of rounding. Refers to grant-financed projects. Includes count for an earlier approved grant with supplementary financing in the current year. A project with multiple grants is counted as one project.
170
Statistical Annex 6 LOAN AND ADF GRANT APPROVALS, BY COUNTRY AND SOURCE OF FUNDS, 2008 (amounts in $ million)
OCR Loan Sovereign Afghanistan Armenia Azerbaijan Bangladesh Bhutan Cambodia China, Peoples Republic of Cook Islands Georgia India Indonesia Kazakhstan Kyrgyz Republic Lao Peoples Democratic Republic Maldives Mongolia Nepal Pakistan Papua New Guinea Philippines Samoa Solomon Islands Sri Lanka Tajikistan Tonga Tuvalu Uzbekistan Viet Nam Subtotal Nonsovereign Afghanistan China, Peoples Republic of India Indonesia Maldives Philippines Viet Nam Subtotal TOTALa 215.4 82.0 51.0 1,526.0 8.6 1,808.3 850.0 340.0 642.0 620.0 90.0 85.0 606.2 6,924.5 ADF Loan 17.3 510.0 29.0 53.8 6.9 110.0 160.0 7.5 529.0 100.0 2.8 59.8 45.0 158.5 1,789.6 Grant 254.0 25.3 30.3 65.4 10.0 74.3 139.3 2.2 14.0 23.2 54.8 11.3 3.2 707.4 Total 254.0 17.3 215.4 592.0 105.3 84.1 1,526.0 15.5 110.0 1,808.3 1,010.0 340.0 65.4 10.0 7.5 74.3 139.3 1,171.0 100.0 620.0 5.0 14.0 173.0 54.8 11.3 3.2 130.0 764.7 9,421.4 % 2.3 0.2 1.9 5.3 0.9 0.8 13.6 0.1 1.0 16.1 9.0 3.0 0.6 0.1 0.1 0.7 1.2 10.5 0.9 5.5 0.0 0.1 1.5 0.5 0.1 0.0 1.2 6.8 84.1
STATISTICAL ANNEXES
60.0 224.1 1,068.6 75.0 7.5 320.0 25.0 1,780.2 8,704.7
1,789.6
707.4
60.0 224.1 1,068.6 75.0 7.5 320.0 25.0 1,780.2 11,201.6
0.5 2.0 9.5 0.7 0.1 2.9 0.2 15.9 100.0
= nil, ADF = Asian Development Fund, OCR = ordinary capital resources. a Totals may not add up because of rounding.
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Statistical Annex 7 PROJECTS INVOLVING COFINANCING,a 2008 ($ million)

Cofinancing ADB
CENTRAL AND WEST ASIA DVA cofinancing Non-DVA cofinancing Afghanistan Roshan Expansion (Phase III)b 60.00 20.00 187.30
Official Grants Loans

10.50 10.50 20.00 20.00
Commercial
10.00 10.00 10.00c, d
Source of Cofinancing
Commercial lender with ADB political risk guarantee Socit de Promotion et de Participation pour la Coopration Economique, France
Kyrgyz Republic Southern Agriculture Area Development (Supplementary)e Tajikistan Rural Development (Supplementary)e Uzbekistan Land Improvemente Surkhandarya Water Supply and Sanitation
20.00
2.50c
Global Environment Facility (GEF)
17.10
3.50c
GEF
60.20 30.00
3.00c 1.50c
GEF Multidonor Trust Fund under the Water Financing Partnership Facility 6,381.52 200.00 6,181.52
EAST ASIA DVA cofinancing Non-DVA cofinancing China, Peoples Republic of Central Yunnan Roads Development ChongqingLichuan Railway Development Dryland Sustainable Agriculture Gansu Baiyin Urban Development Capacity Building for Energy Efficiency Implementation Guangxi Wuzhou Urban Development Inner Mongolia Wind Powerb Integrated Ecosystem and Water Resources Management in the Baiyangdian Basin LanzhouChongqing Railway Development Municipal District Energy Infrastructure Developmentb Ningxia Integrated Ecosystem and Agricultural Development Songhua River Basin Water Pollution Control and Management
1,572.08
5.70 5.70
200.00 150.00 83.00 80.00 35.00 100.00 24.08 100.00 300.00 200.00 100.00 200.00 4.55c
211.50 1,385.60 0.35c 12.08 0.80c 80.90 25.00 4.60 3,166.40 838.00 200.00c 457.14
Industrial and Commercial Bank of China (ICBC), Peoples Republic of China (PRC) China Construction Bank (CCB), PRC Spain Domestic banks Clean Energy Fund under the Clean Energy Financing Partnership Facility CCB, PRC ICBC, PRC CCB, PRC CCB, PRC ICBC, PRC Commercial lenders under ADB B-loan Commercial banks GEF Domestic banks
STATISTICAL ANNEXES
0.30
PACIFIC DVA cofinancing Non-DVA cofinancing Solomon Islands Domestic Maritime Support (Sector) Road Improvement Sector (Supplementary)e
14.00
5.72 5.72
14.00
5.25c 0.47c
European Commission Australian Agency for International Development (AusAID), Australia
a b c d e
= nil, DVA = direct value-added. List excludes technical assistance projects. Nonsovereign private sector loan. DVA cofinancing. Cancelled/not made effective. Anchor ADB project was approved in prior years with cofinancing arranged this year.
172
CONTINUED
Cofinancing Official ADB
SOUTH ASIA DVA cofinancing Non-DVA cofinancing Bangladesh Emergency Disaster Damage Rehabilitation (Sector) 1,838.80
Grants
166.30 41.50 124.80
Loans
1,420.00 370.00 1,050.00
Commercial
4,650.56 140.00 4,510.56
120.00
10.00c 60.00c 20.00c
Post-Literacy and Continuing Education (Supplementary)e PublicPrivate Infrastructure Development Facility Second Urban Governance and Infrastructure Improvement (Sector)
165.00 87.00
2.50c 100.00 4.70 36.10 6.00c
Canadian International Development Agency, Canada Japan Bank for International Cooperation (JBIC), Japan OPEC Fund for International Development (OFID) Swiss Agency for Development and Cooperation (SDC), Switzerland Islamic Development Bank Deutsche Gesellschaft fr Technische Zusammenarbeit, Germany Kredinstalt fr Wiederaufbau (KfW), Germany SDC
Skills Development Bhutan Green Power Development
50.00
105.30
1.00c 55.46
Asian Clean Energy Fund (Japan) under the Clean Energy Financing Partnership Facility Oesterreichische Kontrollbank Aktiengessellschaft, Austria
India Infrastructure Project Financing Facilitye Mundra Ultra Mega Powerb, f
300.00 450.00
2,124.00 450.00 1,470.10 300.00 500.00
STATISTICAL ANNEXES
National Highway 1 PanipatJalandhar Toll Road Orissa Integrated Irrigated Agriculture and Water Management Investment Program Rural Electrification Corporation of Indiag
100.00
140.00c,d 561.00 30.00c 80.00c 100.00c 80.00c
Commercial lenders International Finance Corporation (IFC) A Loan Domestic banks Korea Export Insurance Corporation (KEIC), Republic of Korea The ExportImport Bank of Korea (KEXIM), Republic of Korea Commercial lenders under ADB B-loan Domestic banks OFID Agence Franaise de Developpement, France European Investment Bank KfW
47.20 225.00
Nepal Governance Support Program (Subprogram 1)
106.30
12.00 30.00 6.60 3.40 2.25 4.70 9.15 13.90 0.50
Denmark Department for International Development (DFID), United Kingdom Norway SDC United Nations Capital Development Fund United Nations Development Programme United Nations Population Fund United Nations Childrens Fund Unted Nations Volunteers DFID SDC
Rural Reconstruction and Rehabilitation Sector Development Project (Supplementary)e
20.00c 1.50
Sri Lanka Dry Zone Urban Water and Sanitation
83.00
2.00c
The Netherlands Trust Fund for the Water Financing Partnership Facility
a b c d e f g
= nil, DVA = direct value-added. List excludes technical assistance projects. Nonsovereign private sector loan. DVA cofinancing. Cancelled/not made effective. Anchor ADB project was approved in prior years with cofinancing arranged this year. Includes a tranche of up to $200 million funded by ADB to KEXIM through a risk participation agreement. Nonsovereign public sector loan.
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Cofinancing Official ADB

SOUTHEAST ASIA DVA cofinancing Non-DVA cofinancing Cambodia Health Sector Support (Supplementary)e Road Asset Management 1,361.20
Grants
6.60 6.60
Loans
2,134.60 554.60 1,580.00
Commercial
800.00 225.00 575.00
6.00
1.80c 4.80c 30.00 7.00c
DFID AusAID International Development Agency OFID 225.00c Commercial lenders under ADB B loan JBIC World Bank (WB) JBIC WB
Indonesia Bank Mandiri (Persero)g Fourth Development Policy Support Program Infrastructure Reform Sector Development Program (Subprogram 2)
75.00 200.00
100.00 750.00 100.00 200.00
280.00
Philippines Acquisition and Rehabilitation of the Masinloc Coal-Fired Thermal Power Plantb Agrarian Reform Communities Project II Privatization and Refurbishment of the Calaca Coal-Fired Thermal Power Plantb
200.00
250.00 265.00
IFC A-loan Commercial banks OFID IFC A-loan Commercial lenders under IFC B-loan Domestic banks
70.00 120.00
30.00c 150.00 100.00 210.00
Viet Nam Ho Chi Minh CityLong ThanhDau Giay Expressway Construction TOTAL DVA cofinancing Non-DVA cofinancing
STATISTICAL ANNEXES
410.20 4,973.38 194.81 70.01 124.80
517.60c 3,574.60 924.60 2,650.00 11,842.08 575.00 11,267.08
JBIC
= nil, DVA = direct value-added. a List excludes technical assistance projects. b Nonsovereign private sector loan. c DVA cofinancing. d Cancelled/not made effective. e Anchor ADB project was approved in prior years with cofinancing arranged this year. f Includes a tranche of up to $200 million funded by ADB to KEXIM through a risk participation agreement. g Nonsovereign public sector loan.
174
Statistical Annex 8 LOAN DISBURSEMENTS, 2007 and 2008 (amounts in $ thousand)

2007 % of Total OCR % of Total ADF % of Total Disbursements
OCR Projecta Nondevelopment Finance Institution Development Finance Institution Total Project Loans Programb Sectorc Private Sectord TOTALe
ADF
Total
1,931,730 17,178 1,948,908 1,972,574 821,662 490,627 5,233,771
37 37 38 16 9 100
906,931 906,931 566,069 144,630 1,617,630 2008
56 56 35 9 100
2,838,661 17,178 2,855,839 2,538,643 966,292 490,627 6,851,401
41 41 37 14 7 100
OCR Project Nondevelopment Finance Institution Development Finance Institution Total Project Loans
a
% of Total OCR 35 2 37 42 12 9 100
ADF 1,170,673 1,170,673 713,296 158,665 2,042,634
% of Total ADF 57 57 35 8 100
Total 3,427,555 127,860 3,555,415 3,447,273 917,953 594,382 8,515,023
% of Total Disbursements 40 2 42 40 11 7 100
% Change (2008/2007) OCR 17 644 22 39 (8) 21 24 ADF 29 29 26 10 26 Total 21 644 24 36 (5) 21 24
2,256,882 127,860 2,384,742 2,733,977 759,288 594,382 6,472,389
STATISTICAL ANNEXES
Programb Sectorc Private Sectord TOTALe
= nil, ( ) = negative, ADF = Asian Development Fund, OCR = ordinary capital resources. a A project loan is provided to finance specific projects. ADB uses development finance institutions in its developing member countries (DMCs) as vehicles to finance small to medium-sized projects in the private sector. b A program loan is provided to support DMCs efforts to improve the policy, institutional, and investment environment of sector development. It helps meet shortterm costs that policy adjustments entail. c A sector loan is provided to develop a specific sector or subsector. It finances a large number of subprojects in a single sector or subsector. d Includes nonsovereign public sector loans and excludes equity investments. e Totals may not add up because of rounding.
Statistical Annex 9a PROGRAM LOAN DISBURSEMENTS, 2008 ($ million)

OCR Afghanistan Bangladesh Cambodia India Indonesia Lao Peoples Democratic Republic Nepal Pakistan Philippines Sri Lanka Viet Nam TOTALa 290.00 830.00 1,011.42 587.55 15.00 2,733.98 ADF 2.53 96.94 47.37 8.66 2.59 508.19 47.01 713.30 Total 2.53 96.94 47.37 290.00 830.00 8.66 2.59 1,519.62 587.55 15.00 47.01 3,447.28
= nil, ADF = Asian Development Fund, OCR = ordinary capital resources. a Totals may not add up because of rounding.
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Statistical Annex 9b TRENDS IN PROGRAM LENDING AND GRANT, 19982008

Program Loan and ADF Grant Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
ADF = Asian Development Fund.
Project Loan and ADF Grant $ Million 3,355.0 3,239.6 4,480.6 3,755.7 3,955.7 4,945.3 3,917.6 4,863.7 4,331.6 7,963.9 8,570.6 % 56 66 80 70 70 81 78 81 57 76 77
Total $ Million 5,982.5 4,933.6 5,582.6 5,338.7 5,657.9 6,084.8 5,039.0 6,007.2 7,536.2 10,484.9 11,201.6
$ Million 2,627.5 1,694.0 1,102.0 1,583.0 1,702.2 1,139.5 1,121.4 1,143.5 3,204.6 2,521.0 2,631.1
% 44 34 20 30 30 19 22 19 43 24 23
Statistical Annex 10 NONSOVEREIGN APPROVALS AND TOTAL PROJECT COSTS BY COUNTRY,a 2008 ($ million)
Equity Investment Total ADB Funds Complementary Loan (B-Loan) Partial Credit Guarantee Political Risk Guarantee Swap with DMCs Total ADB Approvals Project Cost/ Fund Size
Loan Afghanistan Roshan Expansion (Phase III) China, Peoples Republic of Municipal District Energy Infrastructure Development Inner Mongolia Wind Power India Mundra Ultra Mega Power Gujarat Paguthan Wind Energy Financing Facilityb India Mortgage Guarantee Company Columbia Asia Hospitals Development GTL Infrastructure Limited Phase II Telecommunication Infrastructure National Highway 1 PanipatJalandhar Toll Road Rural Electrification Corporation of India Indonesia Bank Mandiri (Persero) Maldives Housing Development Finance Corporation Philippines Acquisition and Rehabilitation of the Masinloc Coal-Fired Power Project Privatization and Refurbishment of the Calaca Coal-Fired Thermal Power Plant Viet Nam Saigon Thuong Tin Bank (Sacombank) Regional Asian Clean Energy Private Equity Funds TOTAL
60.00
60.00
10.00
70.00
175.00
STATISTICAL ANNEXES
200.00 24.08 450.00 105.00 38.64 150.00 100.00 225.00 75.00 7.50
18.58 4.50
200.00 24.08 450.00 105.00 18.58 38.64 150.00 100.00 225.00 75.00 12.00
200.00 140.00 225.00
400.00 24.08 450.00 105.00 18.58 38.64 150.00 240.00 225.00 300.00 12.00
1,285.14 73.42 4,226.75 236.77 27.87 154.55 1,184.54 1,067.00 225.00 300.00 33.00
200.00 120.00 25.00 1,780.23
100.00
200.00 120.00 25.00 100.00
565.00
10.00
200.00 120.00 25.00 100.00 2,478.30
1,100.00 890.00 25.00 1,100.00 12,104.05
123.08 1,903.31
= nil, DMC = developing member country. a Includes projects processed by the Private Sector Operations Department and regional departments of ADB. b This project is composed of two loans: (i) Gujarat Paguthan Wind Energy Financing Facility (Samana Phase I - loan amount: $45.0 million; and (ii) CPL Wind Farms Private Limited (Samana Phase II and the Saundatti Project) - loan amount: $60.0 million.
176
Statistical Annex 11 NONSOVEREIGN APPROVALS AND TOTAL PROJECT COSTS BY SECTOR,a 2008 ($ million)
Equity Investment 100.00 23.08 123.08 Total ADB Funds 1,734.08 130.58 38.64 1,903.31 Complementary Loan (B-Loan) 340.00 225.00 565.00 Partial Credit Guarantee Political Risk Guarantee 10.00 10.00 Swap with DMCs Total ADB Approvals 2,084.08 355.58 38.64 2,478.30 Total Project Cost 11,563.63 385.87 154.55 12,104.05
Sector Infrastructure Investment Funds and Financial Institutions Health TOTALb
Loan 1,634.08 107.50 38.64 1,780.23
= nil, DMC = developing member country. a Includes projects processed by the Private Sector Operations Department and regional departments of ADB. b Totals may not add up because of rounding.
Statistical Annex 12 NONSOVEREIGN APPROVALS BY YEAR,a, b 19832008 (amounts in $ million)

No. of Projects 2 1 3 4 7 12 16 17 10 4 9 9 8 7 6 6 3 9 6 6 7 14 13 18 23 16 236 Equity Investmentc 2.96 0.42 3.40 6.01 27.61 35.67 67.59 35.94 20.52 5.42 20.70 48.70 99.41 80.15 49.50 39.44 7.40 77.65 30.36 25.53 35.65 164.37 176.50 230.50 79.75 123.08 1,494.23 Total ADB Funds 2.96 0.42 3.40 12.47 48.11 93.67 163.29 114.79 177.32 55.42 202.80 48.70 167.41 178.65 94.50 175.56 108.90 229.65 67.86 135.53 202.65 256.87 689.52 680.50 805.02 1,903.31 6,619.28 Complementary Loan (B-Loan) 5.00 51.10 24.00 81.50 19.30 5.83 91.50 151.08 61.50 45.00 170.00 330.00 200.00 565.00 1,800.81 Partial Credit Guarantee 50.00 65.00 170.00 18.40 109.80 376.00 789.20 Political Risk Guarantee 122.00 60.00 10.00 50.00 15.00 10.00 267.00 Swap with DMCs Total ADB Approvals 2.96 0.42 3.40 12.47 53.11 93.67 214.39 138.79 177.32 136.92 222.10 48.70 173.24 270.15 144.50 391.64 170.40 396.65 67.86 195.53 542.65 266.87 757.92 1,135.30 1,381.02 2,478.31 9,476.29 Total Project Cost 36.00 2.80 26.50 20.32 519.24 502.32 1,038.66 2,026.13 1,325.18 402.29 1,505.70 919.20 1,050.32 1,788.77 1,239.69 1,152.70 847.70 1,629.84 648.00 1,136.60 2,300.00 2,227.70 8,676.42 7,678.34 3,644.54 12,104.05 54,449.01
Year 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 TOTAL
Loan 6.46 20.50 58.00 95.70 78.85 156.80 50.00 182.10 68.00 98.50 45.00 136.12 101.50 152.00 37.50 110.00 167.00 92.50 513.02 450.00 725.27 1,780.23 5,125.05
STATISTICAL ANNEXES
= nil, DMC = developing member country. a Includes nonsovereign projects processed by the Private Sector Operations Department and regional departments of ADB. Regional departments started nonsovereign operations in 2007. b Net of facilities canceled in full before signing. c Includes equity investments, lines of equity, and equity underwriting.
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Statistical Annex 13 NONSOVEREIGN APPROVALS BY COUNTRY,a, b 19832008 (amounts in $ million)

No. of Projects Afghanistan Azerbaijan Bangladesh Bhutan Cambodia China, Peoples Republic of Georgia India Indonesia Kazakhstan Korea, Republic of Lao Peoples Democratic Republic Malaysia Maldives Mongolia Nepal Pakistan Philippines Samoa Sri Lanka Thailand Viet Nam Regional TOTAL 6 4 8 1 1 21 1 37 15 5 3 1 2 2 2 4 27 28 1 13 10 8 36 236 Equity Investmentc 8.10 14.98 0.53 369.30 237.31 23.85 8.96 2.00 4.50 1.60 3.26 53.38 40.85 0.40 13.58 77.07 634.57 1,494.23 Total ADB Funds 143.10 66.00 152.18 0.53 8.00 940.60 25.00 1,897.92 580.85 225.00 8.96 50.00 12.00 16.50 16.10 52.81 482.48 636.17 0.40 113.08 148.53 218.50 824.57 6,619.28 Complementary Partial Loan Credit (B-Loan) Guarantee 30.00 20.00 646.50 370.00 288.50 5.83 129.90 113.58 170.00 26.50 1,800.81 107.00 9.80 325.00 109.00 18.40 115.00 105.00 789.20 Political Risk Guarantee 35.00 70.00 50.00 52.00 60.00 267.00 Swap with DMCs Total ADB Approvals 208.10 66.00 242.18 0.53 8.00 1,694.10 25.00 2,267.92 879.15 550.00 8.96 100.00 12.00 16.50 16.10 58.64 721.38 768.15 0.40 280.08 318.53 305.00 929.57 9,476.30 Total Project Cost 650.70 66.00 890.36 0.79 32.00 6,519.28 125.00 15,690.85 7,472.02 1,050.00 288.00 1,450.00 29.24 37.50 50.00 218.03 2,997.01 4,688.72 1.60 543.48 3,067.55 1,520.00 7,060.87 54,449.01
Loan 135.00 66.00 137.20 8.00 571.30 25.00 1,660.61 557.00 225.00 50.00 10.00 12.00 14.50 49.55 429.10 595.32 99.50 71.46 218.50 190.00 5,125.05
STATISTICAL ANNEXES
= nil, DMC = developing member country. a Includes nonsovereign projects processed by the Private Sector Operations Department and regional departments of ADB. Regional departments started nonsovereign operations in 2007. b Net of facilities canceled in full before signing. c Includes equity investments, lines of equity, and equity underwriting.
178
Statistical Annex 14 NUMBER OF LOANS AND PROJECTS APPROVED AND UNDER ADMINISTRATION, PROJECT COMPLETION REPORTS (PCRs) CIRCULATED, PROJECTS COMPLETED, LOANS CLOSED, AND PROJECT/PROGRAM PERFORMANCE EVALUATION REPORTS (PPERs) CIRCULATED (as of 31 December 2008)
Cumulative No. of Loans Approveda Afghanistan Armenia Azerbaijan Bangladesh Bhutan Cambodia China, Peoples Republic of Cook Islands Fiji Islands Georgia Hong Kong, China India Indonesia Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Malaysia Maldives Marshall Islands Micronesia, Federated States of Mongolia Myanmar Nauru Nepal Pakistan Papua New Guinea Philippines Samoa Singapore Solomon Islands Sri Lanka Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkmenistan Tuvalu Uzbekistan Vanuatu Viet Nam Regional TOTAL 23 3 13 192 25 46 154 15 16 3 5 130 297 17 6 81 26 68 77 19 12 8 41 32 1 116 284 63 204 33 14 16 143 12 23 84 15 3 29 9 98 7 2,463 Cumulative No. of Effective Loans 22 2 11 188 23 46 142 13 16 3 5 119 293 15 6 81 26 68 77 17 12 8 41 32 1 116 272 61 200 31 14 16 141 12 22 84 14 3 25 9 86 6 2,379 Cumulative No. of Projects Approvedb 21 2 9 169 22 36 151 14 16 3 5 106 261 12 6 80 20 60 75 19 11 6 35 28 1 104 214 48 173 28 14 15 121 12 17 80 15 2 24 8 84 20f 2,147 Cumulative No. of Blended Loans 1 3 14 2 2 1 3 25 2 1 1 1 1 2 2 45 12 18 11 3 2 4 4 1 161 Cumulative No. of Supplementary Loans 1 1 4 1 2 2 3 1 2 9 5 2 4 4 7 2 1 1 1 53 Cumulative No. of Cofinanced Projectsc 5 26 1 9 21 1 15 26 3 4 9 2 2 6 20 38 8 33 3 3 26 5 7 1 4 15 1 294
STATISTICAL ANNEXES
= 0. a Includes nonsovereign loans but excludes terminated loans. b A project with multiple loans is counted as one project. Supplementary loans, special implementation assistance loans, and subprogram loans of program loan clusters are not counted as separate projects. c These are non-ADB funds generated by ADBs financing partnership operations including loans, credit enhancements, and grants, fully or partially administered by ADB, and/or cofinanced under cooperation/sector-wide approach arrangements. d Includes projects/loans which have been approved but awaiting effectivity, inactive loans, fully disbursed nonsovereign loans, but still under administration; excludes projects/loans exclusively financed from other sources.
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No. of Loans Under Administrationd 13 3 13 53 6 20 62 3 2 3 56 36 8 7 18 1 10 4 13 24 65 10 17 5 46 13 1 2 19 43 3 579
No. of Projects Under Administrationa,d,g 13 2 9 42 4 19 60 2 2 3 46 30 6 7 16 1 10 3 12 22 46 6 17 4 36 13 1 1 17 39 3 492
Cumulative No. of PCRs Circulatedg 125 16 17 84 12 11 5 52 203 8 5 61 16 42 56 8 10 3 19 26 1 82 141 36 134 22 7 14 80 1 7 59 5 16 1 7 8 37 5 1,442
No. of Projects Completed in 2008e,g 1 2 6 3 6 1 3 1 2 2 9 1 3 1 6 1 1 49
No. of Loans Closed in 2008 2 1 4 7 1 3 6 1 2 6 2 1 15 5 6 1 4 1 7 75
No. of of PCRs Circulated in 2008g 5 1 5 6 1 8 12 1 3 5 1 1 4 8 1 2 4 1 1 2 9 1 82
No. of PPERs Circulated in 2008g 1 2 2 1 2 1 1 3 1 14 Afghanistan Armenia Azerbaijan Bangladesh Bhutan Cambodia China, Peoples Republic of Cook Islands Fiji Islands Georgia Hong Kong, China India Indonesia Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Malaysia Maldives Marshall Islands Micronesia, Federated States of Mongolia Myanmar Nauru Nepal Pakistan Papua New Guinea Philippines Samoa Singapore Solomon Islands Sri Lanka Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkmenistan Tuvalu Uzbekistan Vanuatu Viet Nam Regional TOTAL
STATISTICAL ANNEXES
e Projects which were physically completed in 2008. f Includes the regional projectsGreater Mekong Subregion (GMS): Phnom Penh to Ho Chi Minh City Highway (Cambodia and Viet Nam loan components); GMS: EastWest Corridor (Lao Peoples Democratic Republic [Lao PDR] and Viet Nam loan components); AlmatyBishkek Regional Road Rehabilitation (Kazakhstan and Kyrgyz Republic loan components); GMS: Mekong Tourism Development (Cambodia, Lao PDR, and Viet Nam loan components); Regional Power Transmission Modernization (Tajikistan and Uzbekistan loan components); Regional Trade Facilitation and Customs Cooperation Program (Kyrgyz Republic and Tajikistan loan components); Asian Finance and Investment Corporation, Ltd.; Trade Finance Facilitation Program; Establishment of the Pacific Aviation Safety Office Project; Regional Power Transmission Interconnection (Afghanistan and Tajikistan loan components); Micro and Small Enterprise Financing Facility; and GMS Sustainable Tourism Development (Viet Nam loan component and Lao PDR grant component). g Regional projects with loans to multiple countries are reported separately.
180
Statistical Annex 15 AMOUNT OF LOANS APPROVED, CONTRACTS AWARDED, AND DISBURSEMENTS ($ million; as of 31 December 2008)
Cumulative Contracts Awardedc, d, e 608.84 22.90 85.35 6,811.09 135.87 857.67 14,069.07 30.18 193.63 69.86 94.50 13,231.83 17,029.71 449.40 14.49 5,572.55 546.20 1,103.55 1,422.40 78.74 65.12 48.71 576.46 418.77 2.30 1,717.87 14,137.67 725.78 7,650.91 119.51 130.22 65.39 3,553.77 90.28 292.69 4,158.08 58.18 7.67 548.57 47.91 2,677.82 1.28 99,522.80
Cumulative Loans Approveda Afghanistan Armenia Azerbaijan Bangladesh Bhutan Cambodia China, Peoples Republic of Cook Islands Fiji Islands Georgia Hong Kong, China India Indonesia Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Malaysia Maldives Marshall Islands Micronesia, Federated States of Mongolia Myanmar Nauru Nepal Pakistan Papua New Guinea Philippines Samoa Singapore Solomon Islands Sri Lanka Taipei,China Tajikistan Thailand Tonga Tuvalu Uzbekistan Vanuatu Viet Nam Regionalg TOTALh 952.28 83.92 585.40 9,857.49 256.06 1,001.14 21,004.18 45.01 249.90 135.00 101.50 20,586.50 23,523.30 1,066.60 15.14 6,338.33 603.50 1,211.34 1,997.54 116.31 78.13 75.14 676.54 530.86 5.00 2,300.98 19,761.84 1,126.99 10,772.83 159.37 181.08 79.31 4,355.53 100.39 372.54 5,388.07 57.79 7.82 1,230.90 51.25 6,294.12 191.50 143,528.39
Cumulative Net Effective Loansb, c 925.19 67.37 373.00 8,833.74 173.44 1,005.91 17,960.92 27.99 217.09 133.00 94.50 16,548.83 19,418.06 646.52 13.70 5,560.33 605.51 1,216.76 1,413.98 106.04 64.15 70.15 671.49 411.83 2.30 2,032.93 17,057.83 892.88 8,597.89 149.93 144.44 65.82 4,141.72 91.14 369.70 4,207.65 52.26 8.15 948.27 48.99 4,219.83 174.61 119,765.84
Contracts Awarded in 2008c, d, e 53.21 22.90 31.80 506.21 18.78 109.59 1,312.17 6.18 69.86 1,006.44 1,031.96 10.56 0.07 9.57 30.85 4.46 1.56 18.86 64.61 1,804.11 16.36 627.95 9.58 0.02 605.84 67.09 0.04 58.63 372.58 0.67 7,872.48
STATISTICAL ANNEXES
= nil or data not applicable. a Data include nonsovereign loans but exclude terminated loans. The US dollar equivalent is in accordance with the exchange rate prevailing within ADB at the time of loan approval. b Net refers to effective loan amounts less cancellations. c The US dollar equivalent is in accordance with the exchange rate prevailing in ADB on 31 December 2008. d Data exclude nonsovereign loans. e Contracts awarded for development finance institutions/credit loans are based on the amount of subloan disbursements.
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% of Cumulative Contracts Awarded to Cumulative Net Effective Loansc 65.81 33.99 22.88 77.10 78.34 85.26 78.33 107.81 89.19 52.52 100.00 79.96 87.70 69.51 105.74 100.22 90.20 90.70 100.60 74.25 101.51 69.44 85.85 101.68 100.00 84.50 82.88 81.28 88.99 79.71 90.15 99.35 85.80 99.06 79.17 98.82 111.32 94.12 57.85 97.80 63.46 0.73 83.10
Disbursements in 2008 80.54 8.03 20.76 615.64 4.27 113.45 1,292.81 1.34 9.67 69.86 1,655.63 1,003.15 8.31 27.11 52.51 2.72 3.56 34.68 61.66 1,923.34 19.88 853.17 2.63 0.07 259.54 50.01 0.60 48.97 264.56 26.55 8,515.02
Cumulative Disbursementsf 559.50 8.03 87.88 6,856.05 116.59 789.34 13,437.54 27.91 192.53 94.86 94.50 12,005.42 18,400.99 619.04 13.70 5,560.32 552.15 1,134.33 1,413.98 71.49 64.15 46.35 579.47 411.83 2.30 1,703.70 14,234.56 710.59 8,389.48 108.29 144.44 65.82 3,161.71 91.14 223.10 4,207.65 52.26 7.16 534.00 48.99 2,633.66 162.84 99,619.63
% of Cumulative Disbursements to Cumulative Net Effective Loans 60.47 11.92 23.56 77.61 67.22 78.47 74.82 99.69 88.69 71.32 100.00 72.55 94.76 95.75 100.00 100.00 91.19 93.23 100.00 67.41 100.00 66.07 86.30 100.00 100.00 83.80 83.45 79.58 97.58 72.22 100.00 100.00 76.34 100.00 60.35 100.00 100.00 87.86 56.31 100.00 62.41 93.26 83.18 Afghanistan Armenia Azerbaijan Bangladesh Bhutan Cambodia China, Peoples Republic of Cook Islands Fiji Islands Georgia Hong Kong, China India Indonesia Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Malaysia Maldives Marshall Islands Micronesia, Federated States of Mongolia Myanmar Nauru Nepal Pakistan Papua New Guinea Philippines Samoa Singapore Solomon Islands Sri Lanka Taipei,China Tajikistan Thailand Tonga Tuvalu Uzbekistan Vanuatu Viet Nam Regional TOTAL
STATISTICAL ANNEXES
f The cumulative disbursements may exceed the cumulative contracts awarded due to disbursed amount without procurement contract summary sheet, e.g., interest during construction, contingencies, and nonsovereign loans which do not require procurement. g Data include regional loan on Establishment of the Pacific Aviation Safety Office and private sector loans to Asian Finance and Investment Corporation Ltd., Trade Finance Facilitation Program, and Micro and Small Enterprise Financing Facility. h Totals may not add up because of rounding.
182
Statistical Annex 16 TECHNICAL ASSISTANCE GRANT APPROVALS BY COUNTRY AND REGIONAL ACTIVITIES,a, b 19672008, 2007, 2008 (amounts in $ thousand)
19672008
No. Afghanistan Armenia Azerbaijan Bangladesh Bhutan Brunei Darussalam Cambodia China, Peoples Republic of Cook Islands Fiji Islands Georgia India Indonesia Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Malaysia Maldives Marshall Islands 60 5 22 331 105 1 151 563 29 80 2 254 498 58 36 33 71 234 93 56 46 42 134 38 7 279 325 3 137 334 85 2 59 229 1 58 159 30 55 4 20 71 55 235 5,090 1,509 6,599 Amount 65,647.70 2,200.00 12,122.00 183,156.17 42,443.15 600.00c 99,384.60 310,321.65 9,995.00 27,349.80 720.00 181,634.86 276,609.17d 26,177.00 12,840.70 5,010.15 40,951.40 118,107.08 25,352.30 19,525.00 18,757.00 24,428.00 69,370.65 10,716.00 1,946.81 132,139.70 187,931.13 2,100.00 54,651.12 158,264.25 27,081.50 577.42 18,245.24 96,398.10 100.00 33,886.06 60,299.60 28,550.90 16,051.50 715.00 5,914.75 37,080.00 16,364.76 177,804.46 2,639,521.68 906,254.61 3,545,776.29 % 1.85 0.06 0.34 5.17 1.20 0.02 2.80 8.75 0.28 0.77 0.02 5.12 7.80 0.74 0.36 0.14 1.15 3.33 0.71 0.55 0.53 0.69 1.96 0.30 0.05 3.73 5.30 0.06 1.54 4.46 0.76 0.02 0.51 2.72 0.003 0.96 1.70 0.81 0.45 0.02 0.17 1.05 0.46 5.01 74.44 25.56 100.00 No. 2 3 8 4 5 33 1 1 1 11 9 1 3 5 1 3 10 10 2 5 4 3 2 1 5 2 1 1 2 1 20 160 82 242 TASF Financing 2,800.00 900.00 4,867.85 1,080.00 1,259.00 17,314.00 250.00 120.00 3,500.00 14,510.00d 60.00 1,200.00 1,350.00 450.00 4,850.00 5,733.00 160.00 1,300.00 105.00 800.00 1,661.06 300.00 3,000.00 150.00 1,400.00 3,295.00 72,414.90 38,277.25 110,692.15 JSF Financing 1,825.00 1,600.00 475.00 500.00 6,800.00 900.00 2,293.00 400.00 2,100.00 1,950.00 1,000.00 1,700.00 1,500.00 1,350.00 1,100.00 2,000.00 600.00 700.00 600.00 6,745.00 36,138.00 6,950.00 43,088.00
2007
PEF Financing 2,000.00 2,000.00 2,000.00 RCIF Financing 300.00 300.00 7,100.00 7,400.00 Other Sources 1,700.00 1,000.00 1,250.00 3,168.00 200.00 500.00 750.00 500.00 500.00 120.00 11,500.00 213.52 1,250.00 600.00 1,000.00 12,000.00 3,085.00 39,336.52 50,325.70 89,662.22 Total 4,500.00 900.00 7,692.85 2,680.00 2,984.00 20,482.00 700.00 250.00 120.00 10,800.00 16,160.00 60.00 1,700.00 4,143.00 400.00 2,550.00 7,220.00 20,233.00 1,700.00 1,873.52 2,650.00 2,455.00 2,800.00 600.00 3,261.06 1,000.00 15,000.00 150.00 1,400.00 600.00 13,125.00 150,189.43 102,652.95 252,842.38 % 1.78 0.36 3.04 1.06 1.18 8.10 0.28 0.10 0.05 4.27 6.39 0.02 0.67 1.64 0.16 1.01 2.86 8.00 0.67 0.74 1.05 0.97 1.11 0.24 1.29 0.40 5.93 0.06 0.55 0.24 5.19 59.40 40.60 100.00
STATISTICAL ANNEXES
Micronesia, Federated States of Mongolia Myanmar Nauru Nepal Pakistan Palau, Republic of Papua New Guinea Philippines Samoa Singapore Solomon Islands Sri Lanka Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkmenistan Tuvalu Uzbekistan Vanuatu Viet Nam All DMCs Regional TOTAL
= nil or data not applicable, CCF = Climate Change Fund, DMC = developing member country, JSF = Japan Special Fund, PEF = Pakistan Earthquake Fund, RCIF = Regional Cooperation and Integration Fund, TASF = Technical Assistance Special Fund. a Excludes technical assistance financed under loans that are included in ADBs loan data. b Data are adjusted to exclude technical assistance projects withdrawn by governments. c Reimbursable technical assistance. d Includes $10 million from ordinary capital resources as a contribution to the Java Reconstruction Fund.
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2008 No.
3 1 2 8 3 1 8 31 2 2 1 25 8 1 1 3 9 1 6 1 10 10 1 4 11 1 1 6 2 4 2 1 2 3 22 197 102 299
TASF Financing
1,155.00 1,000.00 1,150.00 2,925.00 950.00 3,221.00 15,900.00 350.00 125.00 600.00 14,165.00 3,950.00 300.00 1,250.00 3,545.00 1,300.00 225.00 2,600.00 6,202.00 225.00 3,850.00 1,000.00 1,550.00 240.00 1,270.00 800.00 350.00 6,465.00 76,663.00 42,641.97 119,304.97
JSF Financing
1,800.00 990.00 650.00 1,800.00 9,800.00 1,300.00 800.00 600.00 750.00 3,200.00 1,300.00 1,600.00 400.00 2,800.00 3,160.00 1,200.00 300.00 1,300.00 700.00 1,200.00 5,600.00 41,250.00 13,700.00 54,950.00
RCIF Financing
888.00 650.00 1,538.00 8,920.00 10,458.00
CCF Financing
600.00 1,400.00 2,000.00 3,000.00 5,000.00
Other Sources
600.00 c 2,150.00 3,450.00 7,700.00 977.00 1,000.00 646.00 80.00 2,400.00 600.00 50.00 1,500.00 327.75 14,790.00 36,270.75 48,517.63 84,788.38
Total
2,955.00 1,000.00 1,150.00 4,515.00 2,488.00 600.00 5,021.00 19,450.00 350.00 125.00 600.00 27,415.00 12,950.00 300.00 800.00 1,250.00 5,122.00 750.00 5,500.00 225.00 4,546.00 7,882.00 400.00 3,025.00 9,410.00 1,200.00 1,600.00 1,900.00 890.00 2,770.00 1,300.00 700.00 1,127.75 1,550.00 26,855.00 157,721.75 116,779.60 274,501.35
%
1.08 0.36 0.42 1.64 0.91 0.22 1.83 7.09 0.13 0.05 0.22 9.99 4.72 0.11 0.29 0.46 1.87 0.27 2.00 0.08 1.66 2.87 0.15 1.10 3.43 0.44 0.58 0.69 0.32 1.01 0.47 0.26 0.41 0.56 9.78 57.46 42.54 100.00 Afghanistan Armenia Azerbaijan Bangladesh Bhutan Brunei Darussalam Cambodia China, Peoples Republic of Cook Islands Fiji Islands Georgia India Indonesia Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Malaysia Maldives Marshall Islands
STATISTICAL ANNEXES
Micronesia, Federated States of Mongolia Myanmar Nauru Nepal Pakistan Palau, Republic of Papua New Guinea Philippines Samoa Singapore Solomon Islands Sri Lanka Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkmenistan Tuvalu Uzbekistan Vanuatu Viet Nam All DMCs Regional TOTAL
184
Statistical Annex 17 TECHNICAL ASSISTANCE GRANT APPROVALS, 2008 ($ thousand)

TA Type Sector TASF JSF RCIF CCF Others Source Total
Afghanistan Water Resources Development Security Plan for Project Implementation Development of Wind Energy Subtotal Armenia NorthSouth Road Corridor Development Program Subtotal Azerbaijan Power Transmission Enhancement Railways Sector Development Program Subtotal Bangladesh Urban Primary Health Care Sector Development Program (Supplementary) Financial Management and Monitoring Strengthening the Governments Institutional Capacity for Improving Food Security Capacity Development for the Infrastructure Development Company Limited Primary Education Sector Development Program Strengthening the Resilience of the Water Sector in Khulna to Climate Change Capacity Development for Madrasah Education Supporting the Establishment of Khulna Water Supply and Sewerage Authority Subtotal
PP AD AD
AG LW EN
995.00 160.00 1,155.00
1,800.00 1,800.00
1,800.00 995.00 160.00 2,955.00
PP
TC
1,000.00 1,000.00
1,000.00 1,000.00
PP PP
EN TC
150.00 1,000.00 1,150.00
150.00 1,000.00 1,150.00
PP AD AD AD PP AD AD AD
HL MS MS MS ED MS ED WS
400.00 200.00 600.00 500.00 1,000.00 225.00 2,925.00
990.00 990.00
600.00 600.00
400.00 200.00 600.00 500.00 990.00 600.00 1,000.00 225.00 4,515.00
STATISTICAL ANNEXES
Bhutan Strengthening of the Credit Information Bureau AD Road Network II PP Promotion of Clean Power Export Development AD Subtotal Brunei Darussalam Development of the Capital Market and a Modernized Payment and Settlement Systema AD
FI TC EN
350.00 600.00 950.00
650.00 650.00
888.00 888.00
350.00 650.00 1,488.00 2,488.00
FI
600.00 Brunei Darussalam 600.00
600.00
Subtotal Cambodia Enhancing the Resettlement Legal Framework and Institutional Capacity (Supplementary)
600.00
AD
HL
71.00
71.00
= nil or data not applicable; AD = advisory; AG = agriculture and natural resources; CCF = Climate Change Fund; ED = education; EN = energy; FI = finance; HL = health, nutrition, and social protection; JSF = Japan Special Fund; LW = law, economic management, and public policy; MS = multisector; PP = project preparatory; RCIF = Regional Cooperation and Integration Fund; TA = technical assistance; TASF = Technical Assistance Special Fund; TC = transport and communications; WS = water supply, sanitation, and waste management. a Approved by the President on a reimbursable basis by the Government of Brunei Darussalam.
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CONTINUED
TA Type
Sector
TASF
JSF
RCIF
CCF
Others
Source
Total
Private Sector and Small and Medium-Sized Enterprise Development Program Second Rural Water Supply and Sanitation Sector Strengthening Technical and Vocational Education and Training Strengthening Institutional Capacity for Emergency Response to Food Crisis and Improving Food Security Implementation of Key Policy Triggers of Subprogram 3 Enhancing Private Sector Competitiveness Provincial/Rural Road Asset Management Subtotal China, Peoples Republic of Western Yunnan Roads Development II (Supplementary) Lanzhou Sustainable Urban Transport (Supplementary) Asset-Backed Securitization for Expressway Financing and Corporate Debt Restructuring in Yunnan Province Providing Emergency Response to Sichuan Earthquake Urban Wastewater Reuse and Sludge Utilization Policy Study Peoples Republic of China: Supporting Fiscal Reforms in High Priority Sectors Qinghai Rural Water Resources Management Chongqing UrbanRural Infrastructure Development Demonstration Strengthening the Capacity of the Judiciary to Implement Economic Laws Heilongjiang Road Development II (Yichun to Nenjiang) Anhui Road Network Development River Basin Water Resources Allocation and Management Policy Capacity Strengthening in Planning and Implementation of Integrated Gasification Combined Cycle Plan Enhancing the Competitiveness and Efficiency of Railway Passenger Operations New Models for Civil Society Participation in Poverty Reduction Guangxi Border Cities Development Improvement of Public Employment Service System in the Western Region ChongqingGuiyang Railway Development Provincial Development Strategies for Two Northeastern Provinces Railway Sector Energy Efficiency Strategy
PP PP PP
LW WS ED
550.00
500.00 800.00
550.00 500.00 800.00
AD AD AD PP
AG FI LW TC
1,500.00 300.00 800.00 3,221.00
500.00 1,800.00
1,500.00 300.00 800.00 500.00 5,021.00
PP PP
TC TC
100.00 150.00
100.00 150.00
AD AD AD AD PP PP AD PP PP AD
FI MS WS LW AG MS LW TC TC AG
150.00 1,000.00 700.00 1,000.00 700.00 900.00 400.00 600.00 600.00 500.00
300.00 MDTF-WFPF 250.00 MDTF-WFPF
150.00 1,000.00 1,000.00 1,000.00 700.00 900.00 400.00 600.00 600.00 750.00
STATISTICAL ANNEXES
AD AD AD PP AD PP AD AD
EN TC HL MS HL TC MS TC
200.00 500.00 400.00 800.00 400.00 500.00 800.00
800.00 CEF
200.00 500.00 400.00 800.00 400.00 500.00 800.00 800.00
= nil or data not applicable; AD = advisory; AG = agriculture and natural resources; CCF = Climate Change Fund; CEF = Clean Energy Fund; ED = education; EN = energy; FI = finance; HL = health, nutrition, and social protection; JSF = Japan Special Fund; LW = law, economic management, and public policy; MDTF-WFPF = Multidonor Trust Fund under the Water Financing Partnership Facility; MS = multisector; PP = project preparatory; RCIF = Regional Cooperation and Integration Fund; TA = technical assistance; TASF = Technical Assistance Special Fund; TC = transport and communications; WS = water supply, sanitation, and waste management.
186
CONTINUED
TA Type
Sector
TASF
JSF
RCIF
CCF
Others
Source
Total
Transport Efficiency through Logistics Development Policy Study Rural Finance Development and Supervision Wuhan Urban Environmental Improvement Jiangxi Sustainable Forest Ecosystem Development Preparing National Guidelines for EcoCompensation in River Basins and a Framework for Soil Pollution Management Design of the National Sulfur Dioxide Emission Trading System Fiscal Policy Support for Economic Development in Henan Utilization of Foreign Capital to Promote Energy Conservation and Energy-Efficient Power Generation Scheduling China Clean Development Mechanism Fund Capacity Development Promoting a More Inclusive and Effective Disaster Risk Management System Enabling the Protection of Jiaozhou Bay Water Quality and Wetland Ecosystem Subtotal Cook Islands Infrastructure Development (Supplementary) Public Sector Review and Improvement Subtotal Fiji Islands Fourth Road Upgrading (Sector) (Supplementary) Preparing Economic Restructuring Program Loan (Supplementary) Subtotal Georgia Ajara Bypass Roads Development Subtotal India Chhattisgarh State Roads Sector Development (Supplementary) Mainstreaming PublicPrivate Partnerships at State Level (Supplementary) Capacity Development of the National Capital Region Planning Board Developing the Power System Master Plan for Bihar Knowledge Management for Enhanced Operational Effectiveness
AD AD PP PP
TC FI WS AG
500.00 400.00 700.00 700.00
500.00 400.00 700.00 700.00
AD AD AD
AG EN LW
400.00 500.00 400.00
400.00 MDTF-WFPF
800.00 500.00 400.00
AD AD AD AD
EN EN MS MS
600.00 300.00 650.00 350.00 15,900.00
900.00 500.00
400.00 MDTF-WFPF 2,150.00
1,500.00 800.00 650.00 750.00 19,450.00
1,400.00
STATISTICAL ANNEXES
PP AD
MS LW
125.00 225.00 350.00
125.00 225.00 350.00
PP PP
TC LW
50.00 75.00 125.00
50.00 75.00 125.00
PP
TC
600.00 600.00
600.00 600.00
PP AD AD AD AD
TC LW MS EN MS
990.00 2,000.00 2,000.00 600.00 1,000.00
990.00 2,000.00 2,000.00 600.00 1,000.00
= nil or data not applicable; AD = advisory; AG = agriculture and natural resources; CCF = Climate Change Fund; EN = energy; FI = finance; JSF = Japan Special Fund; LW = law, economic management, and public policy; MDTF-WFPF = Multidonor Trust Fund under the Water Financing Partnership Facility; MS = multisector; PP = project preparatory; RCIF = Regional Cooperation and Integration Fund; TA = technical assistance; TASF = Technical Assistance Special Fund; TC = transport and communications; WS = water supply, sanitation, and waste management.
Annual Report 2008
187
TA Type
Sector
TASF
JSF
RCIF
CCF
Others
Source
Total
Energy Efficiency Enhancement Project in Assam Integrated Renewable Energy Development Bihar Urban Development National Capital Region Planning Board Integrated Flood and River Erosion Management Arunachal Pradesh Supporting the Assam Governance and Public Resource Management Sector Development Program (Subprogram II) Institutional Strengthening of the Bihar Road Sector Institutional Development of Integrated Water Resources Management in Orissa Preparing and Enhancing Readiness of Proposed North Eastern State Roads Investment Program Integrated Flood and Riverbank Erosion Risk Management Assam (Phase 2): Processing and Institutional Strengthening Capacity Building for Reforming the Khadi and Village Industry Subsector Promoting Inclusive Urban Development in Indian Cities PublicPrivate Partnerships Pilot Projects Initiative (Mainstreaming PublicPrivate Partnerships) Facilitating the Operations of the Energy Conservation Fund Energy Smart in Madhya Pradesh Capacity Building for Himachal Pradesh Power Sector Agencies Capacity Development Programs for Executing Agency Staff of India Projects Agribusiness Infrastructure Development Investment Program (Phase 2) Bihar State Highways II Dedicated Freight Corridor Preparing Nonsovereign Urban Infrastructure Projects Subtotal Indonesia Integrated Citarum Water Resources Management (Supplementary) Metropolitan Sanitation Management and Health (Supplementary) Enhance Continuing Skills Development Regional Roads Development Strengthening Environmental Practices for Road Network Development in Kalimantan Local Government Finance and Governance Reform
PP PP PP PP PP
EN EN WS MS AG
1,400.00 150.00
1,000.00 1,000.00 700.00
750.00 MDTF-WFPF
1,000.00 1,400.00 1,000.00 700.00 900.00
AD AD AD
LW TC AG
1,000.00
600.00
250.00 MDTF-WFPF
600.00 1,000.00 250.00
PP
TC
800.00
800.00
PP AD AD
AG IN MS
150.00 1,000.00
2,000.00
750.00 MDTF-WFPF
900.00 2,000.00 1,000.00
STATISTICAL ANNEXES
PP
MS
2,000.00
2,000.00
AD AD AD PP PP PP PP
EN EN MS AG TC TC MS
900.00 225.00 1,000.00 700.00 250.00 14,165.00
1,500.00 1,000.00 9,800.00
1,700.00 DEN-E2 3,450.00
1,700.00 900.00 225.00 1,000.00 700.00 1,500.00 1,250.00 27,415.00
PP PP AD PP AD AD
AG WS ED TC TC LW
500.00 150.00 1,500.00
1,300.00
200.00 GEF 500.00 MDTF-WFPF
200.00 500.00 500.00 1,300.00 150.00 1,500.00
= nil or data not applicable; AD = advisory; AG = agriculture and natural resources; CCF = Climate Change Fund; DEN-E2 = Second Danish Cooperation Fund for Renewable Energy and Energy Efficiency in Rural Areas; ED = education; EN = energy; GEF = Global Environment Facility; IN = industry and trade; JSF = Japan Special Fund; LW = law, economic management, and public policy; MDTF-WFPF = Multidonor Trust Fund under the Water Financing Partnership Facility; MS = multisector; PP = project preparatory; RCIF = Regional Cooperation and Integration Fund; TA = technical assistance; TASF = Technical Assistance Special Fund; TC = transport and communications; WS = water supply, sanitation, and waste management.
188
CONTINUED
TA Type
Sector
TASF
JSF
RCIF
CCF
Others
Source
Total
Institutional Strengthening for Integrated Water Resources Management in the 6 Cis River Basin Territory Social Security Reform and Economic Modeling Capacity Building Subtotal Kazakhstan CAREC Transport Corridor I (Zhambyl Oblast Section) CAREC Transport Corridor I (Zhambyl Oblast Section) (Supplementary) Subtotal Kiribati Economic Management and Public Sector Reform Subtotal Kyrgyz Republic CAREC Transport Corridor I (BishkekTorugart Road) Investment Climate Improvement Program Implementation Support for Investment Climate Reform Subtotal Lao Peoples Democratic Republic Sector-Wide Approach in Education Sector Development (Supplementary) Agriculture and Natural Resources Sector Needs Assessment (Supplementary) Piloting Community e-Centers for Better Health Strengthening Public Financial Management Greater Mekong Subregion Nam Theun 2 Hydroelectric Project Social Safeguards Monitoring Strengthening Higher Education Health Sector Development Program Building Lao PDRs Capacity to Develop Special Economic Zones Capacity Strengthening for Enhancing Aid Effectiveness Subtotal Micronesia, Federated States of Strengthening Public Sector Performance Subtotal
AD
MS
1,000.00
MDTF7,000.00 WFPF/The Netherlands 7,700.00
8,000.00
AD
MS
800.00 3,950.00
1,300.00
800.00 12,950.00
PP PP
TC TC
150.00 150.00 300.00
150.00 150.00 300.00
AD
LW
800.00 800.00
800.00 800.00
STATISTICAL ANNEXES
PP PP PP
TC MS MS
150.00 500.00 600.00 1,250.00
150.00 500.00 600.00 1,250.00
AD AD AD AD
ED AG HL LW
245.00 1,100.00
477.00 Australia 500.00 EAKPF
477.00 245.00 500.00 1,100.00
AD PP PP AD AD
EN ED HL LW LW
400.00 500.00 700.00 600.00 3,545.00
600.00 600.00
977.00
400.00 600.00 500.00 700.00 600.00 5,122.00
AD
LW
750.00 750.00
750.00 750.00
= nil or data not applicable; AD = advisory; AG = agriculture and natural resources; CAREC = Central Asia Regional Economic Cooperation; CCF = Climate Change Fund; EAKPF = Republic of Korea e-Asia and Knowledge Partnership Fund; ED = education; EN = energy; HL = health, nutrition, and social protection; JSF = Japan Special Fund; Lao PDR = Lao Peoples Democratic Republic; LW = law, economic management, and public policy; MDTF-WFPF = Multidonor Trust Fund under the Water Financing Partnership Facility; MS = multisector; PP = project preparatory; RCIF = Regional Cooperation and Integration Fund; TA = technical assistance; TASF = Technical Assistance Special Fund; TC = transport and communications.
Annual Report 2008
189
TA Type
Sector
TASF
JSF
RCIF
CCF
Others
Source
Total
Mongolia Regional Logistics Development Capital Markets Development Agricultural Marketing and Brand Development Urban Transport Development HIV/AIDS Prevention in ADB Infrastructure Projects and the Mining Sector Southeast Gobi Urban and Border Town Development Subtotal Nauru Nauru Trust Fund Subtotal Nepal Capacity Building in Rural Finance Institutions (Supplementary) Transmission and Distribution Project Knowledge Transfer for Public Procurement Enhancing Project Readiness for North-South Fast Track Road Connectivity (PPP) Strengthening Capacity for Managing for Development Results Strengthening Capacity for Macroeconomic Analysis Strengthening Capacity for Managing Climate Change and the Environment Electricity Connectivity and Energy Efficiency I Secondary Towns Integrated Urban Environmental Improvement Rural Finance Sector Development Cluster Program (Subprogram II) Subtotal Pakistan Sindh Basic Urban Services (Supplementary) Competitiveness and Structural Transformation in Pakistan Sustainable Energy Efficiency Development Program Lahore Rapid Mass Transit System Accelerating Economic Transformation Program Sindh Water Resouce Development and Management Investment Program Improving Efficiency and Accountability of North Sindh Urban Services Corporation Limited Market Infrastructure Supporting the Second Balochistan Resource Management Program
PP AD AD PP AD PP
TC FI AG TC HL WS
400.00 500.00 400.00 1,300.00
2,000.00 1,200.00 3,200.00
1,000.00 HIV 1,000.00
400.00 500.00 2,000.00 1,200.00 1,000.00 400.00 5,500.00
AD
FI
225.00 225.00
225.00 225.00
AD PP AD AD AD AD AD PP PP PP
FI EN LW TC LW LW LW EN MS FI
150.00 225.00 500.00 675.00 500.00 150.00 400.00 2,600.00
600.00 700.00 1,300.00
500.00 EAKPF 146.00 NET-WFPF 646.00
600.00 150.00 500.00 225.00 500.00 675.00 500.00 150.00 846.00 400.00 4,546.00
STATISTICAL ANNEXES
PP AD PP PP PP PP
WS LW EN TC LW AG
202.00 350.00 600.00 150.00 800.00
800.00
80.00 CFWS
282.00 350.00 600.00 150.00 800.00 800.00
AD PP PP
WS AG LW
2,500.00 800.00
800.00
2,500.00 800.00 800.00
= nil or data not applicable; AD = advisory; AG = agriculture and natural resources; CCF =Climate Change Fund; CFWS = Cooperation Fund for the Water Sector; EAKPF = Republic of Korea e-Asia and Knowledge Partnership Fund; EN = energy; FI = finance; HIV = Cooperation Fund for Fighting HIV/AIDS in Asia and the Pacific; HIV/AIDS = human immunodeficiency virus/acquired immunodeficiency syndrome; HL = health, nutrition, and social protection; JSF = Japan Special Fund; LW = law, economic management, and public policy; MS = multisector; NET-WFPF = The Netherlands Trust Fund for the Water Financing Partnership Facility; PP = project preparatory; PPP = public-private partnership; RCIF = Regional Cooperation and Integration Fund; TA = technical assistance; TASF = Technical Assistance Special Fund; TC = transport and communications; WS = water supply, sanitation, and waste management.
190
CONTINUED
TA Type
Sector
TASF
JSF
RCIF
CCF
Others
Source
Total
Improving Private Sector Participation and Public Expenditure Management Subtotal Palau, Republic of Development of a Sustainable Health Financing Scheme Subtotal Papua New Guinea Power Sector Development Pilot Border Trade and Investment Development Support for Development Planning National Transport Development Plan (20112020) Subtotal Philippines Capacity Building for Housing Microfinance (Supplementary) Philippines Basic Urban Services Sector Strengthening Provincial and Local Planning and Expenditure Management Phase 2 Pasuquin East Wind Farm Development Road Sector Improvement Integrated Natural Resources and Environmental Management Sector Development Program Water District Development Sector Improving Public Expenditure Management Irrigation System Operation Efficiency Improvement Harmonization and Development Effectiveness Supporting Governance in Justice Sector Reform in the Philippines Subtotal Samoa Afulilo Environmental Enhancement Subtotal Solomon Islands Establishment of the Solomon Islands Maritime Safety Administration Subtotal
AD
LW
800.00 6,202.00
1,600.00
80.00
800.00 7,882.00
AD
HL
400.00 400.00
400.00 400.00
PP PP AD AD
EN IN LW TC
225.00 225.00
1,200.00 900.00 700.00 2,800.00
1,200.00 900.00 225.00 700.00 3,025.00
AD PP AD PP PP PP PP AD PP AD AD
MS MS LW EN TC AG WS LW AG LW LW
650.00 800.00 900.00 1,500.00 3,850.00
650.00 660.00 850.00 1,000.00 3,160.00
500.00 EAKPF 200.00 CEF 1,200.00 MDTF-WFPF 500.00 GDCF 2,400.00
500.00 650.00 650.00 200.00 660.00 850.00 1,200.00 800.00 1,000.00 900.00 2,000.00 9,410.00
STATISTICAL ANNEXES
PP
EN
1,200.00 1,200.00
1,200.00 1,200.00
AD
TC
1,000.00 1,000.00
600.00 EC 600.00
1,600.00 1,600.00
= nil or data not applicable; AD = advisory; AG = agriculture and natural resources; CCF = Climate Change Fund; CEF = Clean Energy Fund; EAKPF = Republic of Korea e-Asia and Knowledge Partnership Fund; EC = European Commission; EN = energy; GDCF = Gender and Development Cooperation Fund; HL = health, nutrition, and social protection; IN = industry and trade; JSF = Japan Special Fund; LW = law, economic management, and public policy; MDTF-WFPF = Multidonor Trust Fund under the Water Financing Partnership Facility; MS = multisector; PP = project preparatory; RCIF = Regional Cooperation and Integration Fund; TA = technical assistance; TASF = Technical Assistance Special Fund; TC = transport and communications; WS = water supply, sanitation, and waste management.
Annual Report 2008
191
TA Type
Sector
TASF
JSF
RCIF
CCF
Others
Source
Total
Sri Lanka Independent External Monitoring of Resettlement Activities of the Southern Transport Development Project (Supplementary) Land Use Planning of the Southern Highway Corridor Institutional Strengthening for Decentralized Service Delivery in the Water Sector Deepening of Fiscal Management Reforms Assessing Colombo Municipality Wastewater Systems Establishment of a Central Procurement Unit in the Road Development Authority Subtotal Tajikistan Cotton Sector Restructuring (Supplementary) CAREC Transport Corridor III (DushanbeUzbekistan Border Road) Subtotal Thailand Greater Mekong Subregion Highway Expansion Greater Mekong Subregion Highway Expansion (Supplementary) Capital Market Development Phase II Capacity Building and School Networking for Educational Services (e-Learning) in Thailand Mainstreaming Energy Efficiency Measures in Thai Municipalities Subtotal
AD AD AD PP PP AD
TC TC WS LW WS TC
175.00 300.00 700.00 150.00 225.00 1,550.00
300.00 300.00
50.00 CFWS 50.00
175.00 300.00 750.00 300.00 150.00 225.00 1,900.00
PP PP
AG TC
240.00 240.00
650.00 650.00
240.00 650.00 890.00
PP PP AD AD AD
TC TC FI ED EN
150.00 120.00 1,000.00 1,270.00
500.00 EAKPF 1,000.00 CEF 1,500.00
150.00 120.00 1,000.00 500.00 1,000.00 2,770.00
STATISTICAL ANNEXES
Timor-Leste Road Network Development PP Capacity Building to Strengthen Public Sector Management and Governance Skills, Phase III AD Subtotal Tonga Urban Planning and Management System Subtotal Tuvalu Capacity Building for Taxation Reforms (Supplementary) Capacity Development for Public Financial Management Subtotal
TC ED
800.00 500.00 1,300.00
800.00 500.00 1,300.00
AD
MS
700.00 700.00
700.00 700.00
AD AD
LW LW
800.00 800.00
270.00 Australia 57.75 Australia 327.75
270.00 857.75 1,127.75
= nil or data not applicable; AD = advisory; AG = agriculture and natural resources; CAREC = Central Asia Regional Economic Cooperation; CCF = Climate Change Fund; CEF = Clean Energy Fund; CFWS = Cooperation Fund for the Water Sector; EAKPF = Republic of Korea e-Asia and Knowledge Partnership Fund; ED = education; EN = energy; FI = finance; JSF = Japan Special Fund; LW = law, economic management, and public policy; MS = multisector; PP = project preparatory; RCIF = Regional Cooperation and Integration Fund; TA = technical assistance; TASF = Technical Assistance Special Fund; TC = transport and communications; WS = water supply, sanitation, and waste management.
192
CONTINUED
TA Type
Sector
TASF
JSF
RCIF
CCF
Others
Source
Total
Uzbekistan Djizzak and Surkhandarya Rural Water Supply and Sanitation Sector (Supplementary) Eligibility of State-Owned Road Enterprises for Participation in ADB-Financed Projects Water Resources Management Sector Subtotal Viet Nam Support for PublicPrivate Development of the O Mon Thermal Power Complex (Supplementary) Developing Benefit Sharing Mechanisms for People Adversely Affected by Power Generation Projects (Supplementary) Ho Chi Minh City Metro Rail System (Supplementary) Health Care in the South Central Coast Region (Supplementary) Viet Nam Water Sector Review (Supplementary) Making Markets Work Better for the Poor Phase 2 Second Small and Medium-Sized Enterprise Development Program Skills Enhancement Support for Developing Capital Markets and Building Capacity in the Financial Sector Hue Water Supply Ho Chi Minh City Water Supply Higher Education Sector Development Strengthening Water Management and Irrigation Systems Rehabilitation Supporting Civil Service Reform Central Region Rural Water Supply and Sanitation Sector Da Nang Water Supply Hai Phong Water Supply Greater Mekong Subregion Ha NoiLang Son and Ha LongMong Cai Expressway Ben LucLong Thanh Expressway Geo-Information Technology for Hazard Risk Assessment Sustainable Rural Infrastructure Development Project in the Northern Mountain Provinces Capacity Building of the National Power Transmission Corporation in a Competitive Power Market Environment Subtotal TOTAL
PP AD PP
WS TC AG
200.00 150.00 350.00
1,200.00 1,200.00
200.00 150.00 1,200.00 1,550.00
PP
EN
740.00
740.00
AD PP PP AD
EN TC HL MS
500.00 500.00
240.00 MDTF-WFPF 550.00 The Netherlands 8,000.00 United Kingdom 1,500.00 NET-WFPF 1,500.00 France 1,500.00 MDTF-WFPF 1,000.00 NET-WFPF 500.00 EAKPF
240.00 500.00 500.00 550.00
AD
IN
400.00
8,400.00
STATISTICAL ANNEXES
PP PP AD PP PP PP PP AD PP PP PP PP PP AD PP
LW ED FI WS WS ED AG LW WS WS WS TC TC AG MS
1,000.00 1,000.00 600.00 1,500.00
500.00 600.00 1,000.00 1,000.00 1,500.00 1,000.00
500.00 600.00 1,000.00 1,500.00 1,500.00 1,000.00 1,000.00 1,000.00 600.00 1,500.00 1,000.00 1,500.00 1,500.00 500.00 1,000.00
AD
EN
225.00 6,465.00 76,663.00
5,600.00 41,250.00
14,790.00
225.00 26,855.00 157,721.75
1,538.00 2,000.00 36,270.75
= nil or data not applicable; AD = advisory; AG = agriculture and natural resources; CCF = Climate Change Fund; EAKPF = Republic of Korea e-Asia and Knowledge Partnership Fund; ED = education; EN = energy; FI = finance; HL = health, nutrition, and social protection; IN = industry and trade; JSF = Japan Special Fund; LW = law, economic management, and public policy; MDTF-WFPF = Multidonor Trust Fund under the Water Financing Partnership Facility; MS = multisector; NET-WFPF = The Netherlands Trust Fund for the Water Financing Partnership Facility; PP = project preparatory; RCIF = Regional Cooperation and Integration Fund; TA = technical assistance; TASF = Technical Assistance Special Fund; TC = transport and communications; WS = water supply, sanitation, and waste management.
Annual Report 2008
193
Statistical Annex 18 TECHNICAL ASSISTANCE GRANT APPROVALS BY SECTOR,a, b 19672008, 2007, 2008
19672008 No. Agriculture and Natural Resources Education Energy Finance Health, Nutrition, and Social Protection Industry and Trade Law, Economic Management, and Public Policy Transport and Communications Water Supply, Sanitation, and Waste Management Multisector TOTAL $ thousand % No. 2007 $ thousand % No. 2008 $ thousand %
1,099 299 533 449 183 265 963 669 272 358 5,090
542,097.02 146,625.72 264,196.11 215,405.72 97,328.42 119,130.00 498,492.30 336,798.30 134,168.45 285,279.65 2,639,521.68
20.54 5.56 10.01 8.16 3.69 4.51 18.89 12.76 5.08 10.81 100.00
18 5 28 6 9 39 26 11 18 160
10,647.00 2,505.00 21,609.06 5,530.00 13,202.52 39,505.00 16,552.85 10,128.00 30,510.00 150,189.43
7.09 1.67 14.39 3.68 8.79 26.30 11.02 6.74 20.31 100.00
21 10 23 11 9 3 34 40 18 28 197
18,135.00 6,967.00 16,503.00 5,525.00 4,171.00 11,300.00 24,922.75 25,445.00 15,507.00 29,246.00 157,721.75
11.50 4.42 10.46 3.50 2.64 7.16 15.80 16.13 9.83 18.54 100.00
= nil. a Excludes technical assistance financed under loans that are included in ADBs loan data and regional activities. b Data are adjusted to exclude technical assistance projects withdrawn by governments.
STATISTICAL ANNEXES
Statistical Annex 19 CONSULTING SERVICES FINANCED THROUGH LOANS BY SECTOR, 2008 (amounts in $ million)
Sector Agriculture and Natural Resources Education Energy Finance Health, Nutrition, and Social Protection Industry and Trade Law, Economic Management, and Public Policy Transport and Communications Water Supply, Sanitation, and Waste Management Multisector TOTAL
= nil.
Loan 19.64 5.34 26.69 3.55 3.92 117.66 11.15 56.87 244.82
% 8.02 2.18 10.90 1.45 1.60 48.06 4.55 23.23 100.00
194
Statistical Annex 20 REGIONAL TECHNICAL ASSISTANCE ACTIVITIES, 2008 ($ thousand)

TASF CONFERENCE Supporting the Boao Forum for Asia Supporting Regional Capacities for Financial Asset and Liability and Risk Management Supporting the Third HighLevel Forum on Aid Effectiveness and its Preparatory Consultation Process Natural Catastrophe Risk Insurance Mechanisms for the Asia and Pacific Region South Asian Bond Markets Conference South Asia Forum on the Impact of Global Economic and Financial Crisis Public Debt and Risk Management Forum Strengthening Capacity of the Developing Member Countries for Managing Credit Enhancement Products Subtotal RESEARCH Establishment of Regional Knowledge Hubs (Supplementary) Bond Financing for Infrastructure Projects in the ASEAN+3 Region Developing Securitization Markets in ASEAN+3 Strategic Partnerships for Policy Development and Action to Foster Regional Cooperation in South Asia Promoting Energy Efficiency in the Pacific Asian Development Outlook 2009 Knowledge Sharing on Infrastructure Public-Private Partnerships in Asia Quantifying the Costs and Benefits of Regional Economic Integration in Asia Minimizing Foreign Exchange Settlement Risk in the ASEAN+3 Region: Support for Group of Experts Enterprise Development and the Challenge of Inclusive Growth Subtotal STUDY Central Asia Regional Economic Cooperation: Transport Sector Strategy Study (Supplementary) Enhancing Effective Regulation of Water and Energy Infrastructure and Utility Services (Supplementary) A Development Framework for Sustainable Urban Transport (Supplementary) Development Study of GMS Economic Corridors (Supplementary) Managing the Cities in Asia (Supplementary) JSF RCIF CCF Others Source Total
320.00
500.00
PRC RPRF
500.00 320.00
500.00 66.00 800.00 650.00
800.00
500.00 800.00 66.00 800.00 650.00
500.00 2,516.00
800.00
320.00
500.00
500.00 4,136.00
150.00
700.00 700.00
150.00 700.00 700.00
STATISTICAL ANNEXES
460.00 910.00
700.00
1,200.00 500.00
CEF
700.00 1,200.00 460.00 500.00 910.00
EAKPF
500.00 2,020.00
1,400.00
700.00
850.00 2,550.00
ICFF
850.00 500.00 6,670.00
325.00
325.00
700.00 220.00
Australia United Kingdom PRC RPRF Spain
700.00 220.00
200.00
400.00 2,000.00
600.00 2,000.00
= nil or data not applicable; ASEAN+3 = Association of Southeast Asian Nations, plus the Peoples Republic of China, Japan, and Republic of Korea; CCF = Climate Change Fund; CEF = Clean Energy Fund; EAKPF = Republic of Korea e-Asia and Knowledge Partnership Fund; GMS = Greater Mekong Subregion; ICFF = Investment Climate Facilitation Fund; JSF = Japan Special Fund; PRC RPRF = Peoples Republic of China Regional Cooperation and Poverty Reduction Fund; RCIF = Regional Cooperation and Integration Fund; TASF = Technical Assistance Special Fund.
Annual Report 2008
195
TASF ASEAN+3 Regional Guarantee and Investment Mechanism Phase 2 (Supplementary) Improving the Implementation of Environmental Safeguards for ADB Projects in Central and West Asia Equity in the Delivery of Public Services in Selected Developing Member Countries Strengthening Pacific Economic Analysis and Policy Development Selected Evaluation Studies for 2008 Managing Water in Asias River Basins: Charting Progress and Facilitating Investment Strengthening Coastal and Marine Resources Management in the Coral Triangle of the Pacific (Phase 1) South Asian Regional Cooperation in 2030: The Potential Role of India and Pakistan Preparing a Response in the Pacific to High Prices Addressing Climate Change in the Asia and Pacific Region Improving Price Collection of NonHousehold Expenditure Components and Updating Purchasing Power Parity Estimates for Selected Developing Member Countries Adopting the Supply and Use Framework Towards 1993 System of National Accounts Compliance in Selected Developing Member Countries Developing a Computable General Equilibrium Modeling Framework for Analyzing the Impacts of Power Trading Between Mongolia and the Peoples Republic of China Harmonization of Bond Standards in ASEAN+3 Attracting and Managing Foreign Direct Investments in the Transitional Economies of Southeast Asia Macroprudential Framework for the Early Detection of Financial Vulnerabilities Subtotal TRAINING Greater Mekong Subregion Phnom Penh Plan for Development Management III (Supplementary) Strengthening Pro-Poor Policy in the Pacific (Supplementary) Anticorruption Seminars, 20082009 Enhancing Collaboration with Supreme Audit Institutions through Project Procurement Related Audits Capacity Building and Institutional Strengthening of the Free Trade Agreement Units of Selected ASEAN Member Countries
JSF
RCIF
CCF
Others
Source
Total
400.00
400.00
150.00 500.00 1,500.00 1,493.00
2,000.00
400.00 Australia
150.00 500.00 1,900.00 1,493.00 2,000.00
850.00
Finland/ GEF
850.00
225.00 1,250.00
750.00
750.00 225.00 1,250.00
600.00
600.00
STATISTICAL ANNEXES
800.00
800.00
150.00 950.00
PRC RPRF EAKPF/ICFF
150.00 950.00
225.00 225.00 7,893.00
2,000.00
750.00
5,670.00
225.00 225.00 16,313.00
900.00
PRC RPRF/ New Zealand Australia
900.00
24.00 450.00
232.00
256.00 450.00
140.00
140.00
500.00
PRC RPRF
500.00
= nil or data not applicable; ASEAN = Association of Southeast Asian Nations; ASEAN+3 = Association of Southeast Asian Nations, plus the Peoples Republic of China, Japan, and Republic of Korea; CCF = Climate Change Fund; EAKPF = Republic of Korea e-Asia and Knowledge Partnership Fund; GEF = Global Environment Facility; ICFF = Investment Climate Facilitation Fund; JSF = Japan Special Fund; PRC RPRF = Peoples Republic of China Regional Cooperation and Poverty Reduction Fund; RCIF = Regional Cooperation and Integration Fund; TASF = Technical Assistance Special Fund.
196
CONTINUED
TASF Capacity Building for Bond Market Development in ASEAN+3 Strengthening the Asian Ombudsman Association Pacific Financial Technical Assistance Centre 20082011 Strengthening Governance and Accountability in Pacific Island Countries (Phase 2) Targeted Capacity Building for Mainstreaming Indigenous Peoples Concerns in Development Promoting South Asian Regional Economic Cooperation II Subtotal OTHERS Core Environment Program and Biodiversity Conservation Corridors Initiative in the Greater Mekong Subregion (Supplementary) JSF RCIF CCF Others Source Total
900.00 1,000.00 600.00 1,500.00 4,614.00
1,500.00 1,500.00
500.00 500.00
400.00 2,032.00 Australia
500.00 900.00 1,000.00 1,900.00 600.00 1,500.00 8,646.00
400.00
6,200.00
PRC RPRF/ Finland/The Netherlands Norway/ Sweden
6,600.00
Development Partnership Program for South Asia (Supplementary) Strengthening Country Safeguard Systems (Supplementary) Enhancing Gender and Development Capacity in Developing Member Countries Phase 2 (Supplementary) Promoting Gender Equality and Womens Empowerment (Supplementary) Fighting HIV/AIDS in Asia and the Pacific (Supplementary) Enhancement of Subregional Cooperation in BIMPEAGA and IMTGT (Supplementary) Energy Sector Strategy and Development 2007 (Supplementary) Private Sector Development Initiative (Supplementary) Mainstreaming Environment for Poverty Reduction (Supplementary)
588.00
588.00
597.97
597.97
STATISTICAL ANNEXES
121.00 1,000.00
1,000.00 1,000.00 1,300.00 300.00 2,600.00
GDCF GDCF HIV
1,000.00 1,000.00 1,300.00 121.00 1,000.00
Australia Poverty and Environment Fund Sweden CFWS
300.00 2,600.00
Rolling Out Air Quality Management in Asia (Supplementary) Promoting Effective Water Management Policies and Practices Phase 5 (Supplementary) Promoting South Asian Regional Economic Cooperation (Supplementary) Implementation of the Seed Capital Assistance Facility Energy for All Initiative
80.00
484.63 1,219.00 4,200.00 2,300.00
484.63 1,219.00 80.00
GEF The Netherlands
4,200.00 2,300.00
= nil or data not applicable; ASEAN = Association of Southeast Asian Nations; ASEAN+3 = Association of Southeast Asian Nations, plus the Peoples Republic of China, Japan, and Republic of Korea; BIMP-EAGA = Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area; CCF = Climate Change Fund; CFWS = Cooperation Fund for the Water Sector; GDCF = Gender and Development Cooperation Fund; GEF = Global Environment Facility; HIV = Cooperation Fund for Fighting HIV/AIDS in Asia and the Pacific; HIV/AIDS = human immunodeficiency virus/acquired immunodeficiency syndrome; IMT-GT = Indonesia-Malaysia-Thailand Growth Triangle; JSF = Japan Special Fund; PRC RPRF = Peoples Republic of China Regional Cooperation and Poverty Reduction Fund; RCIF = Regional Cooperation and Integration Fund; TASF = Technical Assistance Special Fund.
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197
TASF Support for Implementation of the Second Governance and Anticorruption Action Plan Strengthening Sound Environmental Management in the Brunei Darussalam, Indonesia, Malaysia, and Philippines East ASEAN Growth Area Strengthening Sound Environmental Management in the Brunei Darussalam, Indonesia, Malaysia, and Philippines East ASEAN Growth Area (Supplementary) Integrating Human Trafficking and Safe Migration Concerns for Women and Children into Regional Cooperation Enhancing Transport and Trade Facilitation in the Greater Mekong Subregion Pyanj River Basin Flood Management Greater Mekong Subregion Flood and Drought Risk Management and Mitigation Comprehensive Midterm Review of the Brunei DarussalamIndonesiaMalaysiaPhilippines East ASEAN Growth Area Road Map to Development Asia Regional Integration Center, Phase II Institutional Development for Enhanced Subregional Cooperation in the aSEA Region Asian Bonds Online Website Project, Phase II HIV Prevention and Infrastructure: Mitigating Risk in the Greater Mekong Subregion Strengthening Southeast Asian Financial Markets Enhancing Engagement with Pacific Developing Member Countries Second Northern Greater Mekong Subregion Transport Network Improvement Enhancing Social Protection Initiatives in Developing Member Countries Ban SokPleiku Power Transmission Project in the Greater Mekong Subregion Mekong Water Supply and Sanitation Improved Management of Water Resources in Central Asia Central Asia Regional Economic Cooperation Institute, 20092012 Thirteenth Agriculture and Natural Resources Research at International Agricultural Research Centers Assessing the Socioeconomic Effects of the Greater Mekong Subregion Projects Gender-Responsive Decentralized Governance in Asia Strengthening Evidence-Based Policy-Making in the Pacific: Support for Development of National Health Accounts Regional Partnerships for Climate Change Adaptation and Disaster Preparedness Capacity Building for Regional Trade Integration and Facilitation
JSF
RCIF
CCF
Others
Source
Total
2,600.00
GCF
2,600.00
1,500.00
1,500.00
500.00
GEF
500.00
1,600.00
2,000.00
1,000.00 1,000.00
750.00 Australia/ PRC RPRF
1,000.00 1,750.00 1,600.00 2,000.00
300.00 900.00 3,800.00 1,500.00 1,000.00 4,000.00
900.00 1,300.00 1,000.00 400.00
650.00 500.00 500.00
6,000.00 300.00 998.00 500.00 Australia
300.00 900.00 3,800.00 900.00 6,000.00 650.00 1,500.00 1,300.00 1,000.00 1,000.00 1,200.00 998.00 5,000.00
STATISTICAL ANNEXES
NET-WFPF MDTF-WFPF PRC RPRF
3,000.00 950.00 500.00
3,000.00 950.00 500.00
1,000.00 900.00
1,000.00
1,000.00 1,000.00 900.00
= nil or data not applicable, aSEA = archipelagic Southeast Asia, ASEAN = Association of Souteast Asian Nations, CCF = Climate Change Fund, GCF = Governance Coperation Fund, GGEF = Global Environment Facility, HIV = human immunodeficiency virus, JSF = Japan Special Fund, MDTF-WFPF = Multidonor Trust Fund under the Water Financing Partnership Facility, NET-WFPF = The Netherlands Trust Fund for the Water Financing Partnership Facility, PRC RPRF = Peoples Republic of China Regional Cooperation and Poverty Reduction Fund, RCIF = Regional Cooperation and Integration Fund, TASF = Technical Assistance Special Fund.
198
CONTINUED
TASF Knowledge and Innovation Support for ADBs Water Financing Program Expanding the Implementation of the Energy Efficiency Initiative in Developing Member Countries Regional Knowledge and Partnership Networks for Poverty Reduction and Inclusive Growth Capturing and Transferring Air Quality Management Knowledge in Asia Improving Connectivity and Destination Management of Cultural and Natural Resources in the South Asia Subregion Enhancing Financial Disclosure Standards in Armenia, Azerbaijan, and Georgia Strengthening Public Financial Management in Pacific Developing Member Countries Regional Stocktaking and Mapping of Disaster Risk Reduction Interventions for Asia and the Pacific Rural Information and Communication Technology Policy Advocacy, Knowledge Sharing, and Capacity Building Impact of Maternal and Child Health Private Expenditure on Poverty and Inequity Promoting Inclusive Growth through Business Development at the Base of the Pyramid Accelerating the Implementation of the Core Agriculture Support Program Subtotal TOTAL JSF RCIF CCF Others 2,000.00 Source NET-WFPF/ MDTF-WFPF Total 2,000.00
3,000.00
1,000.00 EAKPF/ PRC RPRF
3,000.00 1,000.00
500.00
500.00
1,500.00
2,000.00
600.00 ICFF
2,000.00 600.00 1,500.00
400.00
400.00
300.00 650.00 1,500.00 25,598.97 42,641.97
8,000.00 13,700.00
6,650.00 8,920.00
3,000.00 3,000.00
500.00 326.00 500.00 37,765.63 48,517.63
EAKPF Australia
500.00 626.00 650.00
STATISTICAL ANNEXES
PRC RPRF
2,000.00 81,014.60 116,779.60
= nil or data not applicable, CCF = Climate Change Fund, EAKPF = Republic of Korea e-Asia and Knowledge Partnership Fund, ICFF = Investment Climate Facilitation Fund, JSF = Japan Special Fund, MDTF-WFPF = Multidonor Trust Fund under the Water Financing Partnership Facility, NET-WFPF = The Netherlands Trust Fund for the Water Financing Partnership Facility, PRC RPRF = Peoples Republic of China Regional Cooperation and Poverty Reduction Fund, RCIF = Regional Cooperation and Integration Fund, TASF = Technical Assistance Special Fund.
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199
Statistical Annex 21 NET TRANSFER OF RESOURCES (ORDINARY CAPITAL RESOURCES AND ASIAN DEVELOPMENT FUND),a, b 20062008 ($ million)
OCR 2006 Afghanistan Armenia Azerbaijan Bangladesh Bhutan Cambodia China, Peoples Republic of Cook Islands Fiji Islands Georgia Hong Kong, China India Indonesia Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Malaysia Maldives Marshall Islands Micronesia, Federated States of Mongolia Myanmar Nauru Nepal Pakistan Papua New Guinea Philippines Samoa Singapore Solomon Islands Sri Lanka Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkmenistan Tuvalu Uzbekistan Vanuatu Viet Nam Regional TOTALc 9.54 3.92 53.00 (1.90) 517.25 2.62 264.28 12.15 118.29 (19.32) 11.49 (66.85) (0.22) (5.00) (5.99) 404.94 (38.76) 302.15 6.99 (117.43) 27.59 (7.31) 14.20 1,485.65 2007 4.92 42.35 20.07 607.60 1.89 24.75 1,154.77 156.68 35.15 (20.47) 14.77 (37.11) 1.46 (0.68) (0.68) (6.11) 345.29 (30.21) 80.96 (15.54) (50.87) 12.81 27.55 7.71 2,377.04 2008 8.37 2.87 87.47 6.95 703.60 1.69 (1.76) 1,246.38 (69.88) (47.04) (26.23) 0.72 (51.10) (0.18) (0.47) 0.05 7.17 (2.32) (11.93) 1,037.63 (2.62) 237.15 67.38 (13.56) 7.01 (14.34) 17.63 3,190.63 2006 63.62 4.03 53.64 2.37 45.06 (0.34) 67.44 (1.51) (0.10) 35.76 49.21 3.63 (0.51) 1.94 18.36 62.45 56.07 3.31 (33.70) (1.99) 2.35 66.39 34.05 (3.35) (1.46) 1.14 (0.05) (1.08) 139.44 0.15 666.33 ADF 2007 91.08 12.98 79.19 6.43 45.65 (0.72) 91.50 (49.32) (0.25) 21.35 47.60 3.72 (2.17) 2.83 12.02 43.98 228.84 (5.92) (35.08) (2.47) 1.70 58.07 36.80 (4.19) (1.55) 1.07 (0.03) (1.28) 138.85 0.31 820.98 2008 46.78 8.03 8.62 237.99 0.87 89.16 0.40 69.86 13.37 (0.26) (0.29) 11.19 13.86 0.56
STATISTICAL ANNEXES
(1.24) 2.22 8.97 (2.40) 377.72 (10.90) (42.14) (1.81) (2.23) 52.24 46.87 (4.63) (1.63) 0.28 2.51 (1.74) 187.03 0.55 1,109.79
= nil, ( ) = negative, ADF = Asian Development Fund, OCR = ordinary capital resources. a Net transfer of resources for OCR defined as loan disbursements less principal repayments/prepayments and interest/charges received. Includes nonsovereign loans and net equity investments. b Net transfer of resources for ADF defined as loan disbursements less principal repayments and interest/charges received. c Totals may not add up because of rounding.
200
Statistical Annex 22 NET TRANSFER OF RESOURCES (ORDINARY CAPITAL RESOURCES AND ASIAN DEVELOPMENT FUND),a 19992008 ($ million)
19992003 Average Afghanistan Armenia Azerbaijan Bangladesh Bhutan Cambodia China, Peoples Republic of Cook Islands Fiji Islands Georgia Hong Kong, China India Indonesia Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Malaysia Maldives 27.51 117.84 5.79 53.07 (164.87) 0.10 (2.62) (291.90) 75.35 (12.25) 1.04 (621.21) 39.80 38.61 (47.15) 2.47 6.55 2.93 31.81 (0.30) 0.42 25.65 43.79 (6.66) (160.89) (0.91) (1.04) 94.77 10.56 (426.45) 2.45 0.79 30.26 3.37 216.88 1.63 (902.80) 2004 42.13 19.54 5.28 70.87 0.49 1.14 4.11 (1,036.01) (253.74) (85.45) 2.32 (66.84) 50.36 31.00 (59.48) 0.94 0.40 0.63 38.54 (23.35) (862.98) (14.67) (218.54) (0.17) (0.71) 116.30 19.00 (102.22) (1.26) 0.01 70.82 (0.92) 167.59 (6.32) (2,091.19) 2005 54.17 0.50 81.17 10.34 76.73 544.64 0.53 8.30 457.20 142.80 (153.85) 1.36 (1,756.33) 25.10 72.84 (52.99) 3.66 (0.26) 1.24 20.56 (2.79) 242.91 (9.52) (118.94) (0.35) 1.16 122.70 25.22 (394.42) (1.37) 0.06 69.49 (0.93) 181.62 (27.65) (375.08) 2006 73.16 7.95 106.64 0.47 45.06 517.25 (0.34) 2.62 264.28 79.59 116.78 (0.10) (19.32) 35.76 60.70 (66.85) 3.63 (0.73) 1.94 13.36 56.46 461.01 (35.45) 268.45 (1.99) 2.35 73.38 34.05 (120.78) (1.46) 1.14 27.54 (1.08) 132.13 14.35 2,151.98 2007 96.00 55.33 99.26 6.43 45.65 607.60 (0.72) 1.89 24.75 1,154.77 248.18 (14.17) (0.25) (20.47) 21.35 62.37 (37.11) 5.18 (2.85) 2.83 11.34 37.87 574.13 (36.13) 45.88 (2.47) 1.70 42.53 36.80 (55.06) (1.55) 1.07 12.78 (1.28) 166.40 8.02 3,198.02 2008 55.15 8.03 11.49 325.46 0.87 96.11 703.60 0.40 1.69 68.10 1,246.38 (56.51) (47.30) (0.29) (26.23) 11.19 14.58 (51.10) 0.38 (1.71) 2.27 16.14 (2.32) (14.33) 1,415.35 (13.52) 195.01 (1.81) (2.23) 119.62 46.87 (18.19) (1.63) 0.28 9.52 (1.74) 172.69 18.18 4,300.42
STATISTICAL ANNEXES
Marshall Islands Micronesia, Federated States of Mongolia Myanmar Nauru Nepal Pakistan Papua New Guinea Philippines Samoa Singapore Solomon Islands Sri Lanka Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkmenistan Tuvalu Uzbekistan Vanuatu Viet Nam Regional TOTALb
= nil, ( ) = negative. a Net transfer of resources defined as loan disbursements less principal repayments/prepayments and interest/charges received. Includes private sector loans and net equity investments. b Totals may not add up because of rounding.
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Statistical Annex 23 ASIAN DEVELOPMENT FUND RESOURCES AND COMMITMENT AUTHORITY ADF-CONTRIBUTED RESOURCES ($ million; as of 31 December 2008)
Change in 2008 Valued as of 31 December 2007 ($ equivalent) Australia Austria Belgium Brunei Canada China, Peoples Republic of Denmark Finland France Germany Hong Kong, China Indonesia Ireland Italy Japan Korea, Republic of Luxembourg Malaysia Nauru The Netherlands New Zealand Norway Portugal Singapore Spain Sweden Switzerland Taipei,China Thailand Turkey United Kingdom United States TOTAL 1,608.81 263.21 237.41 1,956.37 21.00 267.76 148.61 1,370.27 2,009.17 49.98 14.96 25.51 841.34 12,414.47 267.95 49.08 11.69 1.93 808.74 127.80 227.65 92.46 7.97 379.13 325.34 407.56 55.83 9.52 107.63 1,149.60 3,419.61 28,678.39 Addition ($ equivalent) 66.08 2.34 7.04 9.50 50.47 7.00 9.54 5.33 48.90 14.41 4.48 0.00 9.10 122.57 299.40 29.88 1.02 1.41 0.00 29.78 4.96 10.63 6.14 1.17 18.84 14.30 12.13 5.16 0.84 0.36 52.20 69.58 914.54 Exchange Rate Adjustment ($ equivalent) (357.40) (12.06) (11.51) (386.18) (13.04) (7.30) (59.81) (91.84) (2.14) (48.28) 3,046.02 (80.24) (2.28) (0.67) (40.17) (32.43) (54.84) (4.89) (0.01) (18.76) (60.45) 24.87 (1.34) (333.78) 1,451.48 Net Change ($ equivalent) (291.32) (9.72) (4.47) 9.50 (335.71) 7.00 (3.50) (1.97) (10.91) (77.43) 4.48 6.96 74.29 3,345.42 (50.36) (1.26) 0.74 (10.39) (27.47) (44.21) 1.25 1.16 0.08 (46.15) 37.00 5.16 (0.50) 0.36 (281.58) 69.58 2,366.02 Valued as of 31 December 2008 ($ equivalent) 1,317.49 253.49 232.94 9.50 1,620.66 28.00 264.26 146.64 1,359.36 1,931.74 54.46 14.96 32.47 915.63 15,759.89 217.59 47.82 12.43 1.93 798.35 100.33 183.44 93.71 9.13 379.21 279.19 444.56 60.99 9.02 108.00 868.02 3,489.20 31,044.41 (SDR equivalenta) 851.20 163.77 150.50 6.14 1,047.06 18.09 170.73 94.74 878.25 1,248.05 35.18 9.67 20.98 591.56 10,182.05 140.58 30.89 8.03 1.25 515.79 64.82 118.52 60.54 5.90 245.00 180.38 287.22 39.40 5.83 69.77 560.80 2,254.28 20,056.97
STATISTICAL ANNEXES
ADF COMMITMENT AUTHORITY ($ million; as of 31 December 2008)

2007 Carryover from ADF VIII Commitment Authority ADF IX Contributionsc ADF VIII Contributions OCR Net Income Transfer Expanded Advance Commitment Authority Loan Savings and Cancellations Credits from Accelerated Note Encashment Program Less: Provision for Disbursement Riskd Provision for Foreign Exchange Volatilitye Total ADF IX Commitment Authority Less: Loans and Grants Committedf ADF Commitment Authority Available for Future Commitments
b
2008 124.43 2,976.46 161.62 160.00 3,895.73 1,133.27 62.97 158.42 15.23 8,371.29 8,248.68 122.61
126.89 2,144.38 164.58 120.00 2,979.70 890.82 157.88 6,268.49 5,833.10 435.39
= data not applicable, ADF = Asian Development Fund, OCR = ordinary capital resources. Note: Totals may not add up because of rounding. a Refers to the special drawing rights (SDR) equivalent of the US dollar amount valued at the rate of $1.547810 per SDR as of 31 December 2008. b The US dollar equivalent of SDR80.39 million at each year-end exchange rates. c Contributions received to finance forgone interest of grants are excluded as they have been incorporated in the computation of the Expanded Advance Commitment Authority. d Applies to contribution and net income transfer received prior to the adoption of the new ADF Financial Framework approved in December 2007. e Represents an allowance to cover the shortfall in the commitment authority due to exchange rate fluctuation during the last 3 months of 2008. f Loans and grants approved from 1 January 2005 to 31 December 2008.
202
Statistical Annex 24 TECHNICAL ASSISTANCE SPECIAL FUND ($ thousand; as of 31 December 2008)

Total Contributions Direct Voluntary Contributions Australia Austria Bangladesh Belgium Canada China, Peoples Republic of Denmark Finland France Germany Hong Kong, China India Indonesia Italy Japan Korea, Republic of Malaysia The Netherlands Amount Utilized
2,484 159 47 1,394 3,346 1,600 1,963 237 1,698 3,315 100 3,310 250 774 47,710 1,900 909 1,338 1,096 3,279 1,736 1,100 190 6 861 1,035 200 5,617 1,500 89,154
a
2,484 159 47 1,394 3,346 1,600 1,963 237 1,698 3,315 100 3,310 250 774 47,710 1,900 909 1,338 1,096 3,279 1,736 1,100 190 6 861 1,035 200 5,617 1,500 89,154 415,934 (3,472) 798,234 1,210,696 1,299,850
STATISTICAL ANNEXES
New Zealand Norway Pakistan Singapore Spain Sri Lanka Sweden Switzerland Taipei,China United Kingdom United States Subtotal Regularized Replenishment Contributions Transfer to Asian Development Fund Allocation from OCR Net Incomeb Subtotal TOTAL
432,617 (3,472) 884,257 1,313,402 1,402,556
( ) = negative, OCR = ordinary capital resources. a Represents Technical Assistance Special Fund (TASF) portion of contributions to the replenishment of the Asian Development Fund and the TASF authorized by Board of Governors Resolutions 182, 214, and 300 at historical values. b Includes income, repayments, and reimbursements to the TASF since 1980, including investment holding gains (losses).
Annual Report 2008
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Statistical Annex 25 JAPAN SPECIAL FUNDRegular and Supplementary Contributions Statement of Activities and Change in Net Assets ($ million)
19882002a Contributions Committed Revenue Total Transfer to Cooperation Fund for Regional Trade and Financial Security Initiative Expenses Exchange Gain (Loss) Translation Adjustments Change in Net Assets 836.0 129.0 965.0 2003 16.6 3.3 19.9 2004 24.2 4.3 28.5 2005 27.3 7.1 34.4 2006 24.5 10.7 35.2 2007 27.7 12.0 39.7 2008 17.4 6.6 24.0 Total 973.7 173.0 1,146.7
767.2 (25.2) (12.5) 160.1
39.6 (0.3) (20.0)
(1.0) 19.7 1.2 9.0
35.9 (0.8) (2.3)
51.1 (0.1) (16.0)
33.7 6.0
55.1 0.2 (30.9)
(1.0) 1,002.3 (25.0) (12.5) 105.9
= nil, ( ) = negative. a Prior years amounts have been restated to conform with the 1995 presentation.
Statistical Annex 26 JAPAN SPECIAL FUNDAsian Currency Crisis Support Facility Statement of Activities and Change in Net Assets ($ million)
19992003 Contributions Committed Revenue Total Transfer to Japan Fund for Poverty Reduction Interest Payment Assistance Written Back Expenses Exchange Gain (Loss) Translation Adjustments Change in Net Assets 241.0a 2.8 243.8 (90.0) 33.2 131.5 (1.7) (26.3) 27.5 2004 0.5 0.5 (0.9) 1.4 2005 1.1 1.1 (0.8) 1.9 2006 1.7 1.7 (0.4) 2.1 2007 1.8 1.8 1.8 2008 1.1 1.1 (0.4) 1.5 Total 241.0 9.0 250.0 (90.0) 33.2 129.0 (1.7) (26.3) 36.2
STATISTICAL ANNEXES
= nil, ( ) = negative. a A guarantee facility is provided under the Asian Currency Crisis Support Facility for which the Government of Japan has made available noninterest-bearing, nonnegotiable notes in the amount of 360 billion yen, encashable by ADB at any time to meet a call on any guarantee. In the absence of any concluded guarantee, the note was returned to the Government of Japan on 25 March 2002.
204
Statistical Annex 27 JAPAN FUND FOR POVERTY REDUCTION, 2008

Project Name Afghanistan Development of Mini Hydropower Plants in Badakhshan and Bamyan Provinces Lao Peoples Democratic Republic Alternative Livelihood for Upland Ethnic Groups in Houaphanh Province Micronesia, Federated States of Weno Water Supply Well Remediation Mongolia Energy Conservation and Emissions Reduction from Poor Households Poverty Reduction through Community-Based Natural Resource Management Water Point and Extension Station Establishment for Poor Herding Families Community-Based Local Road Upgrading and Maintenance in the Western Region of Mongolia Philippines Developing Microinsurance Sri Lanka Improvement of Rural Access Roads and Livelihood Development for the Poor Tajikistan Community Participatory Flood Management Viet Nam DemandDriven Skills Training for Poverty Reduction in the Cuu Long (Mekong) River Delta Livelihood Improvement of Vulnerable Ethnic Minority Communities Affected by the Song Bung 4 Hydropower Project in Quang Nam Province Community-Based Early Childhood Care and Development TOTAL Amount ($ thousand)
12,000
1,820
980
2,000 2,000 2,000 2,000
1,000
2,000
3,000
1,300 2,000 1,900 34,000
STATISTICAL ANNEXES
Annual Report 2008
205
Statistical Annex 28 PROJECTS WITH ADB-ADMINISTERED GRANT FINANCING, 2008 APPROVALS

Amount ($ thousand) Project Name BILATERAL TRUST FUNDS Australia CAM LAO SOL TUV TUV REG REG REG REG REG REG REG REG Technical Assistance Soft Loan Component
Road Asset Management Sector-Wide Approach in Education Sector Development (Supplementary) Road Improvement Sector (Supplementary) Capacity Building for Taxation Reforms (Supplementary) Capacity Building for Public Financial Management Enhancing Effective Regulation of Water and Energy Infrastructure and Utility Services (Supplementary) Enhancing Transport and Trade Facilitation in the Greater Mekong Subregion HIV Prevention and Infrastructure: Mitigating Risk in the Greater Mekong Subregion Impact of Maternal and Child Health Private Expenditure on Poverty and Inequity Strengthening Governance and Accountability in Pacific Island Countries (Phase 2) Strengthening Pro-Poor Policy in the Pacific (Supplementary) Private Sector Development Initiative (Supplementary) Strengthening Pacific Economic Analysis and Policy Development Subtotal
4,800.00 477.00 469.88 270.00 57.75 700.00 250.00 6,000.00 326.00 400.00 232.00 300.00 400.00 9,412.75 5,269.88
Canada BAN
Emergency Disaster Damage Rehabilitation (Sector) Subtotal
10,000.00 10,000.00
Second Danish Cooperation Fund for Renewable Energy and Energy Efficiency in Rural Areas IND Facilitating the Operations of the Energy Conservation Fund Energy Smart in Madhya Pradesh Subtotal Finland REG REG
1,700.00 1,700.00
STATISTICAL ANNEXES
Strengthening Coastal and Marine Resources Management in the Coral Triangle of the Pacific (Phase 1) Core Environment Program and Biodiversity Conservation Corridors Initiative in the Greater Mekong Subregion (Supplementary) Subtotal
550.00 4,900.00 5,450.00
France VIE
Ho Chi Minh City Water Supply Subtotal
1,500.00 1,500.00
JapanAsian Clean Energy Fund under the Clean Energy Financing Partnership Facility BHU Green Power Development
1,000.00 1,000.00
Republic of Korea e-Asia and Knowledge Partnership Fund LAO Piloting Community e-Centers for Better Health NEP Knowledge Transfer for Public Procurement PHI Capacity Building for Housing Microfinance (Supplementary) THA Capacity Building and School Networking for Educational Services (e-Learning) in Thailand VIE Geo-Information Technology for Hazard Risk Assessment REG Harmonization of Bond Standards in ASEAN+3 REG Knowledge Sharing on Infrastructure PublicPrivate Partnerships in Asia REG Rural Information and Communication Technology Policy Advocacy, Knowledge Sharing, and Capacity Building REG Regional Knowledge and Partnership Networks for Poverty Reduction and Inclusive Growth Subtotal
500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 4,500.00
ASEAN+3 = Association of Southeast Asian Nations plus the Peoples Republic of China, Japan, and Republic of Korea; BAN = Bangladesh; BHU = Bhutan; CAM = Cambodia; IND = India; LAO = Lao Peoples Democratic Republic; NEP = Nepal; PHI = Philippines; REG = regional; SOL = Solomon Islands; THA = Thailand; TUV = Tuvalu; VIE = Viet Nam.
206
CONTINUED
Amount ($ thousand) Project Name The Netherlands INO Instititutional Strengthening for Integrated Water Resources Management in the 6 Cis River Basin Territory VIE Viet Nam Water Sector Review REG Core Environment Program and Biodiversity Conservation Corridors Initiative in the Greater Mekong Subregion (Supplementary) REG Energy for All Initiative Subtotal The Netherlands Trust Fund for the Water Financing Partnership Facility NEP Secondary Towns Integrated Urban Environmental Improvement SRI Dry Zone Urban Water and Sanitation VIE Hue Water Supply VIE Hai Phong Water Supply REG Mekong Water Supply and Sanitation REG Knowledge and Innovation Support for ADBs Water Financing Program Subtotal New Zealand REG Greater Mekong Subregion Phnom Penh Plan for Development Management III (2nd Supplementary) Subtotal Norway REG Technical Assistance 5,000.00 550.00 800.00 2,300.00 8,650.00 Soft Loan Component
146.00 2,000.00 1,500.00 1,000.00 300.00 800.00 3,746.00 2,000.00
400.00 400.00
STATISTICAL ANNEXES
Development Partnership Program for South Asia (Supplementary) Subtotal
300.00 300.00
Peoples Republic of China Regional Cooperation and Poverty Reduction Fund REG Developing a Computable General Equilibrium Modeling Framework for Analyzing the Impacts of Power Trading between Mongolia and the Peoples Republic of China REG Central Asia Regional Economic Cooperation Institute, 20092012 REG Development Study of GMS Economic Corridors (Supplementary) REG Enhancing Transport and Trade Facilitation in the Greater Mekong Subregion REG Capacity Building and Institutional Strengthening of the Free Trade Agreement Units of Selected ASEAN Member Countries REG Greater Mekong Subregion Phnom Penh Plan for Development Management III (Supplementary) REG Supporting the Boao Forum for Asia REG Core Environment Program and Biodiversity Conservation Corridors Initiative in the Greater Mekong Subregion (Supplementary) REG Regional Knowledge and Partnership Networks for Poverty Reduction and Inclusive Growth REG Accelerating the Implementation of the Core Agriculture Support Program Subtotal Spain PRC REG
150.00 500.00 400.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 4,550.00
Dryland Sustainable Agriculture Managing the Cities in Asia (Supplementary) Subtotal
350.00 2,000.00 2,000.00 350.00
ASEAN = Association of Southeast Asian Nations, GMS = Greater Mekong Subregion, INO = Indonesia, NEP = Nepal, PRC = Peoples Republic of China, REG = regional, SRI = Sri Lanka, VIE = Viet Nam.
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Amount ($ thousand) Project Name Technical Assistance Soft Loan Component
Sweden REG REG
Development Partnership Program for South Asia (Supplementary) Rolling Out Air Quality Management in Asia (Supplementary) Subtotal
288.00 484.63 772.63
Switzerland BAN Post Literacy and Continuing Education (Supplementary) BAN Skills Development Subtotal United Kingdom CAM Health Sector Support (Supplementary) NEP Rural Reconstruction and Rehabilitation Sector Development Project (Supplementary) VIE Making Markets Work Better for the Poor (Phase 2) REG A Development Framework for Sustainable Urban Transport (Supplementary) REG A Development Framework for Sustainable Urban Transport (2nd Supplementary) Subtotal MULTIDONOR COOPERATION FUNDS/PARTNERSHIPS Clean Energy Fund PHI Pasuquin East Wind Farm Development PRC Railway Sector Energy Efficiency Strategy PRC Capacity Building for Energy Efficiency Implementation THA Mainstreaming Energy Efficiency Measures in Thai Municipalities REG Promoting Energy Efficiency in the Pacific Subtotal Cooperation Fund for Fighting HIV/AIDS in Asia and the Pacific MON HIV/AIDS Prevention in ADB Infrastructure Projects and the Mining Sector REG Fighting HIV/AIDS in Asia and the Pacific (Supplementary) REG Fighting HIV/AIDS in Asia and the Pacific (2nd Supplementary) Subtotal Cooperation Fund for the Water Sector PAK Sindh Basic Urban Services (Supplementary) SRI Institutional Strengthening for Decentralized Service Delivery in the Water Sector REG Promoting Effective Water Management Policies and Practices Phase 5 (Supplementary) Subtotal European Commission SOL Domestic Maritime Support (Sector) SOL Establishment of the Solomon Islands Maritime Safety Administration Subtotal Gender and Development Cooperation Fund PHI Supporting Governance in Justice Sector Reform in the Philippines REG Enhancing Gender and Development Capacity in Developing Member Countries Phase 2 (Supplementary) REG Promoting Gender Equality and Womens Empowerment (Supplementary) Subtotal
2,500.00 6,000.00 8,500.00
1,800.00 20,000.00 8,000.00 120.00 100.00 8,220.00 21,800.00
200.00 800.00 800.00 1,000.00 1,200.00 3,200.00 800.00
STATISTICAL ANNEXES
1,000.00 1,000.00 300.00 2,300.00
80.00 50.00 1,219.00 1,349.00
5,250.00 600.00 600.00 5,250.00
500.00 1,000.00 1,000.00 2,500.00
BAN = Bangladesh, CAM = Cambodia, HIV/AIDS = human immunodeficiency virus/acquired immunodeficiency syndrome, MON = Mongolia, NEP = Nepal, PAK = Pakistan, PHI = Philippines, PRC = Peoples Republic of China, REG = regional, SOL = Solomon Islands, SRI = Sri Lanka, THA = Thailand, VIE = Viet Nam.
208
CONTINUED
Amount ($ thousand) Project Name Governance Cooperation Fund REG Support for Implementarion of the Second Governance and Anticorruption Action Plan Subtotal Global Environment Facility INO Integrated Citarum Water Resources Management (Supplementary) KGZ Southern Agriculture Area Development (Supplementary) PRC Ningxia Integrated Ecosystem and Agricultural Development TAJ Rural Development (Supplementary) UZB Land Improvement REG Implementation of the Seed Capital Assistance Facility REG Strengthening Coastal and Marine Resources Management in the Coral Triangle of the Pacific (Phase 1) REG Strengthening Sound Environmental Management in the Brunei Darussalam, Indonesia, Malaysia, and Philippines East ASEAN Growth Area (Supplementary) Subtotal Investment Climate Facilitation Fund REG Harmonization of Bond Standards in ASEAN+3 REG Minimizing Foreign Exchange Settlement Risk in the ASEAN+3 Region: Support for Group of Experts REG Enhancing Financial Disclosure Standards in Armenia, Azerbaijan, and Georgia Subtotal Technical Assistance 2,600.00 2,600.00 Soft Loan Component
200.00 2,500.00 4,545.00 3,500.00 3,000.00 4,200.00 300.00 500.00 5,200.00 13,545.00
450.00 850.00 600.00 1,900.00
STATISTICAL ANNEXES
Poverty and Environment Fund REG Mainstreaming Environment for Poverty Reduction (Supplementary) Subtotal Water Financing Partnership Facility IND Instititutional Development of Integrated Water Resources Management in Orissa IND Integrated Flood and River Erosion Management Arunachal Pradesh IND Integrated Flood and Riverbank Erosion Risk Management Assam (Phase 2): Processing and Institutional Strengthening INO Metropolitan Sanitation Management and Health (Supplementary) INO Instititutional Strengthening for Integrated Water Resources Management in the 6 Cis River Basin Territory PHI Water District Development Sector PRC Enabling the Protection of Jiaozhou Bay Water Quality and Wetland Ecosystem PRC Preparing National Guidelines for Eco-Compensation in River Basins and a Framework for Soil Pollution Management PRC River Basin Water Resources Allocation and Management Policy PRC Urban Wastewater Reuse and Sludge Utilization Policy Study UZB Surkhandarya Water Supply and Sanitation VIE Da Nang Water Supply VIE Developing Benefit Sharing Mechanisms for People Adversely Affected by Power Generation Projects (Supplementary) REG Improved Management of Water Resources in Central Asia REG Knowledge and Innovation Support for ADBs Water Financing Program Subtotal
2,600.00 2,600.00
250.00 750.00 750.00 500.00 2,000.00 1,200.00 400.00 400.00 250.00 300.00 1,500.00 1,500.00 240.00 998.00 1,200.00 10,738.00 1,500.00
TOTAL
84,188.38
70,014.88
ASEAN = Association of Southeast Asian Nations; ASEAN+3 = ASEAN plus the Peoples Republic of China, Japan, and Republic of Korea; IND = India; INO = Indonesia; KGZ = Kyrgyz Republic; PHI = Philippines; PRC = Peoples Republic of China; REG = regional; TAJ = Tajikistan; UZB = Uzbekistan; VIE = Viet Nam.
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Statistical Annex 29 CONTRACTS AWARDED BY COUNTRY OF ORIGIN,a 2008 PROJECT LOANSORDINARY CAPITAL RESOURCES (amounts in $ million)
Goods, Related Services, and Civil Works Amount Afghanistan Armenia Australia Austria Azerbaijan Bangladesh Belgium Bhutan Brunei Darussalam Cambodia Canada China, Peoples Republic of Cook Islands Denmark Fiji Islands Finland France Georgia Germany Hong Kong, China India Indonesia Ireland Italy Japan Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Luxembourg Malaysia Maldives Marshall Islands Micronesia, Federated States of Mongolia Myanmar Nauru Nepal The Netherlands New Zealand Norway Pakistan Palau Papua New Guinea Philippines Portugal Samoa Singapore Solomon Islands Spain Sri Lanka Sweden Switzerland Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkey Turkmenistan Tuvalu United Kingdom United States Uzbekistan Vanuatu Viet Nam Regional International TOTALb 0.28 7.84 7.24 0.70 1.95 1,236.83 0.98 6.18 3.71 0.41 122.20 1.20 695.93 106.10 2.75 64.67 10.57 286.99 0.37 28.80 1.31 0.02 151.45 10.87 25.09 5.44 124.39 0.75 0.32 0.69 11.98 0.35 0.98 8.28 16.14 74.03 3,017.74 % Distribution 0.01 0.26 0.24 0.02 0.06 40.99 0.03 0.20 0.12 0.01 4.05 0.04 23.06 3.52 0.09 2.14 0.35 9.51 0.01 0.95 0.04 0.00 5.02 0.36 0.83 0.18 4.12 0.02 0.01 0.02 0.40 0.01 0.03 0.27 0.53 2.45 100.00 Consulting Services Amount 5.47 1.64 2.46 6.78 1.36 1.67 28.03 4.51 0.68 1.16 0.01 1.06 2.00 0.06 10.22 0.50 3.34 6.11 10.44 3.47 0.39 91.36 % Distribution 5.99 1.79 2.69 7.42 1.49 1.83 30.68 4.93 0.74 1.27 0.01 1.16 2.18 0.06 11.19 0.55 3.65 6.69 11.43 3.80 0.43 100.00 Total Procurement Amount 5.75 7.84 7.24 0.70 3.58 1,239.29 0.98 6.18 3.71 7.19 123.56 2.87 723.96 110.60 2.75 65.35 10.57 288.16 0.01 0.37 29.86 3.31 0.06 0.02 161.67 10.87 25.59 8.78 130.50 0.75 0.32 0.69 11.98 0.35 11.42 11.75 16.53 74.03 3,109.09 % Distribution 0.18 0.25 0.23 0.02 0.12 39.86 0.03 0.20 0.12 0.23 3.97 0.09 23.29 3.56 0.09 2.10 0.34 9.27 0.00 0.01 0.96 0.11 0.00 0.00 5.20 0.35 0.82 0.28 4.20 0.02 0.01 0.02 0.39 0.01 0.37 0.38 0.53 2.38 100.00
STATISTICAL ANNEXES
= nil, 0.00 = % is less than 0.01. a Represents the country of origin where the goods are mined, produced, grown, and/or manufactured, based on US dollar value equivalent of contract. b Totals may not add up because of rounding.
210
Statistical Annex 30 CONTRACTS AWARDED BY COUNTRY OF ORIGIN,a 2008 PROJECT LOANSASIAN DEVELOPMENT FUND (amounts in $ million)
Goods, Related Services, and Civil Works Amount Afghanistan Armenia Australia Austria Azerbaijan Bangladesh Belgium Bhutan Brunei Darussalam Cambodia Canada China, Peoples Republic of Cook Islands Denmark Fiji Islands Finland France Georgia Germany Hong Kong, China India Indonesia Ireland Italy Japan Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Luxembourg Malaysia Maldives Marshall Islands Micronesia, Federated States of Mongolia Myanmar Nauru Nepal The Netherlands New Zealand Norway Pakistan Palau Papua New Guinea Philippines Portugal Samoa Singapore Solomon Islands Spain Sri Lanka Sweden Switzerland Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkey Turkmenistan Tuvalu United Kingdom United States Uzbekistan Vanuatu Viet Nam Regional International TOTALb 3.49 19.45 3.78 14.30 165.97 0.05 17.23 13.35 0.08 80.60 0.11 15.46 69.86 1.50 0.98 97.72 40.79 1.16 11.90 0.06 0.07 2.21 8.51 18.74 0.86 2.74 0.02 0.98 5.72 0.30 37.39 0.45 2.53 196.79 4.28 0.21 0.01 3.54 9.09 0.02 0.02 89.59 0.04 0.69 23.50 34.83 0.50 5.89 1.88 0.05 230.70 1,239.99 % Distribution 0.28 1.57 0.31 1.15 13.38 0.00 1.39 1.08 0.01 6.50 0.01 1.25 5.63 0.12 0.08 7.88 3.29 0.09 0.96 0.00 0.01 0.18 0.69 1.51 0.07 0.22 0.00 0.08 0.46 0.02 3.02 0.04 0.20 15.87 0.35 0.02 0.00 0.29 0.73 0.00 0.00 7.23 0.00 0.06 1.90 2.81 0.04 0.48 0.15 0.00 18.60 100.00 Consulting Services Amount 0.01 2.02 6.07 3.29 11.45 4.28 3.31 1.11 1.40 0.43 1.75 23.41 13.06 8.07 0.66 0.82 1.14 0.26 0.13 2.34 3.42 0.74 4.54 0.24 0.09 0.61 1.35 2.30 0.10 4.98 8.57 22.80 3.17 137.92 % Distribution 0.00 1.47 4.40 2.39 8.30 3.11 2.40 0.80 1.01 0.31 1.27 16.97 9.47 5.85 0.48 0.59 0.83 0.19 0.09 1.69 2.48 0.53 3.29 0.17 0.07 0.44 0.98 1.67 0.07 3.61 6.21 16.53 2.30 100.00 Total Procurement Amount 3.50 21.47 9.85 17.59 177.43 0.05 17.23 17.64 3.39 81.71 0.11 16.86 69.86 1.93 0.98 99.47 64.20 1.16 24.96 0.06 0.07 10.28 9.16 19.56 2.00 3.00 0.02 0.98 5.84 0.30 39.73 3.88 3.26 201.33 4.53 0.31 0.01 4.15 9.09 0.02 0.02 90.95 2.30 0.14 5.67 23.50 34.83 9.07 28.69 1.88 0.05 233.86 1,377.90 % Distribution 0.25 1.56 0.71 1.28 12.88 0.00 1.25 1.28 0.25 5.93 0.01 1.22 5.07 0.14 0.07 7.22 4.66 0.08 1.81 0.00 0.00 0.75 0.66 1.42 0.15 0.22 0.00 0.07 0.42 0.02 2.88 0.28 0.24 14.61 0.33 0.02 0.00 0.30 0.66 0.00 0.00 6.60 0.17 0.01 0.41 1.71 2.53 0.66 2.08 0.14 0.00 16.97 100.00
STATISTICAL ANNEXES
= nil, 0.00 = % is less than 0.01. a Represents the country or origin where the goods are mined, produced, grown and/or manufactured, based on US dollar value equivalent of contract. b Totals may not add up because of rounding.
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Statistical Annex 31 CONTRACTS AWARDED BY COUNTRY OF ORIGIN,a 2008 PROJECT LOANSORDINARY CAPITAL RESOURCES AND ASIAN DEVELOPMENT FUND COMBINED (amounts in $ million)
Goods, Related Services, and Civil Works Amount Afghanistan Armenia Australia Austria Azerbaijan Bangladesh Belgium Bhutan Brunei Darussalam Cambodia Canada China, Peoples Republic of Cook Islands Denmark Fiji Islands Finland France Georgia Germany Hong Kong, China India Indonesia Ireland Italy Japan Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Luxembourg Malaysia Maldives Marshall Islands Micronesia, Federated States of Mongolia Myanmar Nauru Nepal The Netherlands New Zealand Norway Pakistan Palau Papua New Guinea Philippines Portugal Samoa Singapore Solomon Islands Spain Sri Lanka Sweden Switzerland Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkey Turkmenistan Tuvalu United Kingdom United States Uzbekistan Vanuatu Viet Nam Regional International TOTALb 3.49 19.45 4.06 22.13 173.21 0.76 17.23 13.35 2.03 1,317.42 0.98 6.18 3.82 15.88 69.86 123.69 2.17 793.64 146.89 3.91 76.57 10.62 0.07 289.20 8.51 18.74 0.37 29.66 2.74 0.02 0.98 5.72 0.30 37.39 1.77 2.53 0.02 348.24 15.15 25.30 0.01 3.54 14.53 0.02 0.02 213.98 0.75 0.36 1.37 23.50 46.81 0.35 1.48 14.17 18.01 0.05 304.72 4,257.72 % Distribution 0.08 0.46 0.10 0.52 4.07 0.02 0.40 0.31 0.05 30.94 0.02 0.15 0.09 0.37 1.64 2.91 0.05 18.64 3.45 0.09 1.80 0.25 0.00 6.79 0.20 0.44 0.01 0.70 0.06 0.00 0.02 0.13 0.01 0.88 0.04 0.06 0.00 8.18 0.36 0.59 0.00 0.08 0.34 0.00 0.00 5.03 0.02 0.01 0.03 0.55 1.10 0.01 0.03 0.33 0.42 0.00 7.16 100.00 Consulting Services Amount 0.01 2.02 11.54 3.29 11.45 4.28 4.95 3.57 8.18 1.80 1.67 29.78 27.92 13.74 9.23 0.67 0.82 2.20 0.26 0.13 2.34 5.42 0.79 14.76 0.24 0.60 0.61 3.34 7.47 2.30 0.10 4.98 19.01 26.28 0.40 3.17 229.28 % Distribution 0.00 0.88 5.03 1.44 5.00 1.87 2.16 1.56 3.57 0.78 0.73 12.99 12.18 5.99 4.03 0.29 0.36 0.96 0.11 0.05 1.02 2.36 0.35 6.44 0.11 0.26 0.27 1.46 3.26 1.00 0.04 2.17 8.29 11.46 0.17 1.38 100.00 Total Procurement Amount 3.50 21.47 15.60 25.43 184.66 0.76 17.23 17.64 6.98 1,321.00 0.98 6.18 3.82 24.06 69.86 125.49 3.84 823.42 174.81 3.91 90.30 10.62 0.07 298.43 9.17 19.56 0.37 31.87 3.00 0.02 0.98 5.84 0.30 39.73 7.19 3.32 0.02 363.00 15.39 25.89 0.01 4.15 17.87 0.02 0.02 221.45 3.05 0.45 6.35 23.50 46.81 0.35 20.49 40.45 18.41 0.05 307.89 4,487.00 % Distribution 0.08 0.48 0.35 0.57 4.12 0.02 0.38 0.39 0.16 29.44 0.02 0.14 0.09 0.54 1.56 2.80 0.09 18.35 3.90 0.09 2.01 0.24 0.00 6.65 0.20 0.44 0.01 0.71 0.07 0.00 0.02 0.13 0.01 0.89 0.16 0.07 0.00 8.09 0.34 0.58 0.00 0.09 0.40 0.00 0.00 4.94 0.07 0.01 0.14 0.52 1.04 0.01 0.46 0.90 0.41 0.00 6.86 100.00
STATISTICAL ANNEXES
= nil, 0.00 = % is less than 0.01. a Represents the country or origin where the goods are mined, produced, grown and/or manufactured, based on US dollar value equivalent of contract. b Totals may not add up because of rounding.
212
Statistical Annex 32 ESTIMATES OF PAYMENT TO SUPPLYING COUNTRIES FOR FOREIGN PROCUREMENT UNDER PROGRAM LENDING,a 2008
Ordinary Capital Resources (OCR) $ million Afghanistan Armenia Australia Austria Azerbaijan Bangladesh Belgium Bhutan Brunei Darussalam Cambodia Canada China, Peoples Republic of Cook Islands Denmark Fiji Islands Finland France Georgia Germany Hong Kong, China India Indonesia Ireland Italy Japan Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Luxembourg Malaysia Maldives Marshall Islands Micronesia, Federated States of Mongolia Myanmar Nauru Nepal The Netherlands New Zealand Norway Pakistan Palau Papua New Guinea Philippines Portugal Samoa Singapore Solomon Islands Spain Sri Lanka Sweden Switzerland Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkey Turkmenistan Tuvalu United Kingdom United States Uzbekistan Vanuatu Viet Nam Regional International TOTALb 2.68 90.04 9.45 0.66 3.67 37.61 0.24 11.45 0.01 53.69 359.35 5.44 0.01 12.27 41.30 0.02 112.38 57.94 50.90 101.55 11.82 84.34 417.28 0.51 131.52 0.01 0.01 0.28 183.39 0.39 3.65 1.55 34.46 12.64 4.14 3.99 3.25 8.65 1.15 326.81 0.01 13.13 4.57 22.16 24.87 0.05 95.64 0.01 17.44 0.51 62.43 302.62 0.47 0.10 17.11 2,741.60 % Distribution 0.10 3.28 0.34 0.02 0.13 1.37 0.01 0.42 0.00 1.96 13.11 0.20 0.00 0.45 1.51 0.00 4.10 2.11 1.86 3.70 0.43 3.08 15.22 0.02 4.80 0.00 0.00 0.01 6.69 0.01 0.13 0.06 1.26 0.46 0.15 0.15 0.12 0.32 0.04 11.92 0.00 0.48 0.17 0.81 0.91 0.00 3.49 0.00 0.64 0.02 2.28 11.04 0.02 0.00 0.62 100.00 Asian Development Fund (ADF) $ million 1.01 5.88 2.11 0.94 4.25 0.10 0.17 22.65 94.37 1.44 2.03 8.36 18.36 18.69 38.56 50.86 0.59 38.98 105.23 0.19 20.99 0.18 0.16 64.20 0.18 0.05 0.92 0.07 4.91 1.08 1.29 1.70 0.01 2.35 0.68 27.07 2.16 0.86 6.68 6.88 0.10 29.87 9.26 0.23 11.97 28.65 2.03 4.62 643.89 % Distribution 0.16 0.91 0.33 0.15 0.66 0.02 0.03 3.52 14.66 0.22 0.31 1.30 2.85 2.90 5.99 7.90 0.09 6.05 16.34 0.03 3.26 0.03 0.02 9.97 0.03 0.01 0.14 0.01 0.76 0.17 0.20 0.26 0.00 0.36 0.11 4.20 0.34 0.13 1.04 1.07 0.02 4.64 1.44 0.04 1.86 4.45 0.31 0.72 100.00 Combined OCR and ADF $ million 3.70 95.92 11.55 0.66 4.61 41.86 0.35 11.45 0.17 76.34 453.71 6.88 0.01 14.30 49.66 0.02 130.75 76.62 89.45 152.41 12.41 123.31 522.51 0.70 152.51 0.01 0.18 0.44 247.59 0.57 0.05 4.56 1.62 39.36 13.72 5.43 5.70 3.25 11.00 1.83 353.88 0.01 15.29 5.43 28.84 31.75 0.15 125.50 0.01 26.70 0.74 74.40 331.27 2.49 0.10 21.73 3,385.48 % Distribution 0.11 2.83 0.34 0.02 0.14 1.24 0.01 0.34 0.01 2.25 13.40 0.20 0.00 0.42 1.47 0.00 3.86 2.26 2.64 4.50 0.37 3.64 15.43 0.02 4.50 0.00 0.01 0.01 7.31 0.02 0.00 0.13 0.05 1.16 0.41 0.16 0.17 0.10 0.32 0.05 10.45 0.00 0.45 0.16 0.85 0.94 0.00 3.71 0.00 0.79 0.02 2.20 9.79 0.07 0.00 0.64 100.00
STATISTICAL ANNEXES
= nil, 0.00 = % is less than 0.01. a Estimates are based on import data drawn from the latest information available on borrowers trade statistics compiled by the International Monetary Fund Direction of Trade Statistics. b Totals may not add up because of rounding.
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Statistical Annex 33 CUMULATIVE CONTRACTS AWARDED BY COUNTRY OF ORIGINa TECHNICAL ASSISTANCE OPERATIONS (amounts in $ million, as of 31 December 2008)
ADBs Own Resources Afghanistan Armenia Australia Austria Azerbaijan Bangladesh Belgium Bhutan Cambodia Canada China, Peoples Republic of Cook Islands Denmark Fiji Islands Finland France Georgia Germany Hong Kong, China India Indonesia Ireland Italy Japan Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Malaysia Maldives Marshall Islands Micronesia Mongolia Myanmar Nauru Nepal The Netherlands New Zealand Norway Pakistan Palau Papua New Guinea Philippines Portugal Samoa Singapore Solomon Islands Spain Sri Lanka Sweden Switzerland Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkey Turkmenistan Tuvalu United Kingdom United States Uzbekistan Vanuatu Viet Nam Regional International Organizations TOTALb 1.25 0.66 163.39 1.35 0.47 15.81 4.48 0.43 1.90 97.52 20.15 0.09 12.66 1.27 10.22 29.76 0.01 25.46 30.58 59.91 18.28 0.20 5.14 30.32 1.14 0.01 5.03 1.45 3.17 12.77 0.11 0.19 0.01 1.51 0.94 0.01 10.94 23.24 68.19 5.34 27.17 0.03 1.22 96.42 0.10 0.86 17.78 0.50 5.75 13.17 7.53 11.21 1.08 0.47 14.17 0.74 0.32 0.42 0.10 0.06 175.47 254.94 0.95 0.75 4.23 3.49 23.21 1,327.48 % Distribution 0.09 0.05 12.31 0.10 0.04 1.19 0.34 0.03 0.14 7.35 1.52 0.01 0.95 0.10 0.77 2.24 0.00 1.92 2.30 4.51 1.38 0.02 0.39 2.28 0.09 0.00 0.38 0.11 0.24 0.96 0.01 0.01 0.00 0.11 0.07 0.00 0.82 1.75 5.14 0.40 2.05 0.00 0.09 7.26 0.01 0.06 1.34 0.04 0.43 0.99 0.57 0.84 0.08 0.04 1.07 0.06 0.02 0.03 0.01 0.00 13.22 19.20 0.07 0.06 0.32 0.26 1.75 100.00 Administered Trust Funds 1.63 64.11 0.25 5.13 1.10 0.07 3.17 45.50 4.98 0.16 5.07 0.72 6.45 17.88 16.24 6.15 24.69 11.35 0.84 12.06 1.31 0.05 1.56 0.48 1.88 1.37 0.05 0.19 0.59 0.71 0.01 5.04 20.34 20.00 4.52 11.62 0.40 24.93 0.04 2.96 0.19 2.90 3.51 5.77 6.54 0.07 1.25 8.19 0.18 0.03 0.27 0.05 66.50 87.71 0.33 0.01 6.21 8.22 4.07 527.54 % Distribution 0.31 12.15 0.05 0.97 0.21 0.01 0.60 8.62 0.94 0.03 0.96 0.14 1.22 3.39 3.08 1.17 4.68 2.15 0.16 2.29 0.25 0.01 0.30 0.09 0.36 0.26 0.01 0.04 0.11 0.13 0.00 0.95 3.86 3.79 0.86 2.20 0.08 4.72 0.01 0.56 0.04 0.55 0.66 1.09 1.24 0.01 0.24 1.55 0.03 0.01 0.05 0.01 12.60 16.63 0.06 0.00 1.18 1.56 0.77 100.00 Japan Special Fund 0.02 126.09 0.95 0.02 6.36 2.26 0.15 0.48 67.93 7.95 17.95 0.23 9.03 23.32 35.76 22.02 21.79 12.33 2.68 28.48 0.13 0.01 4.03 0.23 0.98 4.21 0.03 0.01 0.02 0.75 0.01 2.46 28.38 64.07 3.36 3.81 1.51 33.85 0.09 0.87 10.69 0.22 1.02 3.86 9.29 11.81 2.71 0.16 12.07 0.10 0.14 0.05 134.93 172.57 0.83 1.20 3.21 3.12 4.90 907.49 % Distribution 0.00 13.89 0.10 0.00 0.70 0.25 0.02 0.05 7.49 0.88 1.98 0.03 1.00 2.57 3.94 2.43 2.40 1.36 0.30 3.14 0.01 0.00 0.44 0.02 0.11 0.46 0.00 0.00 0.00 0.08 0.00 0.27 3.13 7.06 0.37 0.42 0.17 3.73 0.01 0.10 1.18 0.02 0.11 0.43 1.02 1.30 0.30 0.02 1.33 0.01 0.02 0.01 14.87 19.02 0.09 0.13 0.35 0.34 0.54 100.00 Total Contracts Awarded 2.91 0.66 353.57 2.30 0.74 27.30 7.84 0.64 5.55 210.91 33.09 0.24 35.68 2.22 25.71 70.95 0.01 77.45 58.75 106.42 41.96 0.20 8.65 70.87 2.58 0.06 10.61 2.14 6.04 18.34 0.18 0.38 0.03 2.85 1.66 0.02 18.38 71.96 152.26 13.21 42.57 0.03 3.13 155.28 0.19 1.77 31.42 0.91 9.68 20.50 22.59 29.56 3.85 1.88 34.43 1.03 0.49 0.73 0.15 0.06 376.89 515.26 2.12 1.96 13.63 14.82 32.17 2,762.46 % Distribution 0.11 0.02 12.80 0.08 0.03 0.99 0.28 0.02 0.20 7.63 1.20 0.01 1.29 0.08 0.93 2.57 0.00 2.80 2.13 3.85 1.52 0.01 0.31 2.57 0.09 0.00 0.38 0.08 0.22 0.66 0.01 0.01 0.00 0.10 0.06 0.00 0.67 2.60 5.51 0.48 1.54 0.00 0.11 5.62 0.01 0.06 1.14 0.03 0.35 0.74 0.82 1.07 0.14 0.07 1.25 0.04 0.02 0.03 0.01 0.00 13.64 18.65 0.08 0.07 0.49 0.54 1.16 100.00
STATISTICAL ANNEXES
= nil, 0.00 = % is less than 0.01. a Represents the country of origin where the goods are mined, produced, grown and/or manufactured, based on US dollar value equivalent of contract. b Totals may not add up because of rounding.
214
Statistical Annex 34 CONTRACTS AWARDED BY COUNTRY OF ORIGIN,a 20062008 TECHNICAL ASSISTANCE OPERATIONS (amounts in $ million)
2006 Amount Afghanistan Armenia Australia Austria Azerbaijan Bangladesh Belgium Bhutan Brunei Darussalam Cambodia Canada China, Peoples Republic of Cook Islands Denmark Fiji Islands Finland France Georgia Germany Hong Kong, China India Indonesia Ireland Italy Japan Kazakhstan Kiribati Korea, Republic of Kyrgyz Republic Lao Peoples Democratic Republic Luxembourg Malaysia Maldives Marshall Islands Micronesia, Federated States of Mongolia Myanmar Nauru Nepal The Netherlands New Zealand Norway Pakistan Palau Papua New Guinea Philippines Portugal Samoa Singapore Solomon Islands Spain Sri Lanka Sweden Switzerland Taipei,China Tajikistan Thailand Timor-Leste Tonga Turkey Turkmenistan Tuvalu United Kingdom United States Uzbekistan Vanuatu Viet Nam Regional International Organizations TOTALb 0.39 0.30 19.07 1.30 0.14 2.47 0.17 0.01 1.29 10.84 4.39 0.01 2.75 0.09 2.60 1.09 4.28 4.46 9.80 3.82 0.07 2.43 0.38 0.01 0.44 0.36 0.14 1.39 0.03 0.08 0.02 0.25 0.01 2.28 2.75 8.53 0.89 5.44 0.35 10.62 0.01 2.65 1.36 0.76 1.04 2.73 0.03 0.30 1.95 0.01 0.07 0.02 12.51 24.95 0.37 1.23 155.69 % 0.25 0.19 12.25 0.83 0.09 1.59 0.11 0.00 0.83 6.96 2.82 0.01 1.76 0.06 1.67 0.70 2.75 2.86 6.29 2.45 0.04 1.56 0.24 0.01 0.28 0.23 0.09 0.89 0.02 0.05 0.01 0.16 0.01 1.47 1.76 5.48 0.57 3.50 0.23 6.82 0.01 1.70 0.87 0.49 0.67 1.75 0.02 0.19 1.25 0.00 0.04 0.01 8.03 16.03 0.24 0.79 100.00 Amount 0.85 0.23 32.33 1.98 0.07 0.10 0.37 10.63 5.05 0.35 0.19 0.30 3.58 1.39 4.46 17.59 5.47 0.12 0.11 3.52 0.17 0.02 0.26 0.16 0.83 1.48 0.04 0.04 0.32 0.22 2.97 2.17 7.91 0.12 4.78 0.02 0.08 11.74 0.07 0.03 2.31 0.18 1.03 1.96 2.79 0.24 0.94 2.62 0.03 0.03 0.04 0.04 15.39 26.87 0.72 0.01 2.23 5.67 185.17 2007 % 0.46 0.12 17.46 1.07 0.04 0.06 0.20 5.74 2.73 0.19 0.10 0.16 1.93 0.75 2.41 9.50 2.95 0.06 0.06 1.90 0.09 0.01 0.14 0.08 0.45 0.80 0.02 0.02 0.17 0.12 1.60 1.17 4.27 0.06 2.58 0.01 0.05 6.34 0.04 0.02 1.25 0.10 0.56 1.06 1.51 0.13 0.51 1.41 0.02 0.01 0.02 0.02 8.31 14.51 0.39 0.00 1.20 3.06 100.00 Amount 0.26 0.10 23.72 0.08 0.01 3.85 0.37 0.09 0.77 8.84 3.33 0.10 1.46 0.30 0.85 11.04 8.84 1.91 11.51 2.13 0.05 0.29 6.13 0.12 0.45 0.22 0.19 1.90 0.04 0.20 2.06 0.95 8.74 0.11 4.15 0.28 6.80 0.01 0.88 0.12 1.53 0.65 1.71 0.19 0.66 0.04 1.19 0.11 0.06 0.10 12.57 16.84 0.26 2.10 0.59 151.83 2008 % 0.17 0.06 15.62 0.05 0.01 2.54 0.24 0.06 0.51 5.82 2.20 0.06 0.96 0.20 0.56 7.27 5.82 1.26 7.58 1.40 0.03 0.19 4.04 0.08 0.30 0.14 0.12 1.25 0.03 0.13 1.35 0.63 5.75 0.07 2.73 0.18 4.48 0.01 0.58 0.08 1.00 0.43 1.13 0.13 0.44 0.03 0.78 0.07 0.04 0.06 8.28 11.09 0.17 1.38 0.39 100.00
STATISTICAL ANNEXES
= nil, 0.00 = % is less than 0.01. a Represents the country of origin where the goods are mined, produced, grown, and or manufactured based on US dollar value equivalent of contract. b Totals may not add up because of rounding.
Photo Credits Cover: Ian Gill; 6: Michael Hanson/Aurora Photos/Corbis; 158: Jonathan Blair/Corbis About the front cover Residents of Kinjipi village in Papua New Guineas Western Highlands stop a basketball game to discuss how life will change when they have a paved road. ADB has financed the upgrading of several roads in the area. The Annual Report 2008 is printed using vegetable oil-based inks on recycled paper. The paper is made using a totally chlorine-free process.
Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines Tel +63 2 632 4444 Fax +63 2 636 2444 information@adb.org www.adb.org Treasury Department Fax +63 2 632 4707 +63 2 632 4120 SWIFT Address ASDBPH MM
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ANNUAL REPORT

VOLUME 2|FINANCIAL REPORT

About the Asian Development Bank

VOLUME 2|FINANCIAL REPORT

101 102 104 105 106 107

111 112 113 114 115

121 122 124 125 126 127

130 131 133 134 135 136

139 140 142 143 144 145

148 149 151 152 153 154

Asian Development Bank

MANAGEMENTS DISCUSSION AND ANALYSIS

MANAGEMENTS DISCUSSION AND ANALYSIS

Annual Report 2008

Basis of Financial Reporting

ORDINARY CAPITAL RESOURCES

Asian Development Bank

TABLE 1: Selected Financial Data

MANAGEMENTS DISCUSSION AND ANALYSIS

699.7 50,443 1.39% 4.14% 3.70% 3.29%

711.4 42,757 1.66% 5.14% 4.72% 4.68%

705.5 37,859 1.86% 4.94% 4.27% 4.31% Current Value Basis

415.6 36,076 1.15% 4.35% 2.99% 3.75%

389.6 36,306 1.07% 4.16% 2.34% 3.58%

101.9 51,575 0.20% 9.18% 3.51% 7.17%

1,159.0 43,726 2.65% 6.40% 7.77% 5.32%

544.1 39,130 1.31% 2.58% 5.48% 3.51%

93.7 37,948 0.23% (1.18%) (1.11%) (1.34%)

562.8 39,391 1.47% 4.25% 3.51% 3.56%

Annual Report 2008

MANAGEMENTS DISCUSSION AND ANALYSIS

31 December 2008 Statutory Basis

31 December 2007 Current Value Basis

Reversal of FAS 133/159 Effectsa

PreFAS 133/159 Basis

Current Value Adjustments

Current Value Basis

427,132 31,434,283 27,087 808,157 105,027

17,968,867 512,089 463,793 $ 70,337,371 $ 32,023,669

5,092,316 722,402 55,358,671 3,842,293

(661,197) 9,642,454 202,847 182,100 616,300 1,153,903 14,978,700 $ 70,337,371

Asian Development Bank

swapped borrowings, and all derivative instruments are reported at cost.

MANAGEMENTS DISCUSSION AND ANALYSIS

Discussion and Analysis on Current Value

Current Value Balance Sheet

Annual Report 2008

MANAGEMENTS DISCUSSION AND ANALYSIS

Current Value Income Statement

31 December 2007 Current Value Basis Current Value Basis

Reversal of FAS 133/159 Effectsa

PreFAS 133/159 Basis

Current Value Adjustments

1,357,981 677,175 6,876 3,737 18,685 2,064,454

1,357,981 677,175 6,876 27,792 18,685 2,088,509

$ 1,357,981 677,175 6,876 3,737 18,685 2,064,454

1,442,338 683,212 5,049 58,897 18,835 2,208,331

1,208,391 141,047 8,357 (3,467) 6,272 1,360,600 (28,096) 450,591 $ 1,126,349 $

1,208,391 141,047 8,357 (3,467) 6,272 1,360,600 (28,096) (111) 699,702

3,467 3,467 24,055 (597,852) 3,467 $ (597,852) $

1,389,778 127,327 (683) 3,998 1,520,420 22,905 14 447,543 579 1,158,952

Asian Development Bank

MANAGEMENTS DISCUSSION AND ANALYSIS

Balance Sheet Effects as of 31 December 2008 Loans After Swaps