ADB reiterates commitment to help Sri Lanka | Daily News

ADB reiterates commitment to help Sri Lanka

The Asian Development Bank (ADB) is working closely with the Sri Lankan government in supporting the country in this challenging time, Masatsugu Asakawa, President, Asian Development Bank told the Press Conference at the ADB 55th Annual Meeting held yesterday in Manila.

“Sri Lanka is facing a very difficult situation with the economy contracting and suffering from very high inflation severely affecting living standards. We are working closely with the government in supporting the country in this challenging time. On September 9 we signed an agreement with the government for a USD 200 million assistance loan which would ensure access to food and protect the livelihood of the poor. Also we are providing support to the country by channeling funds from other ongoing loans. As a key long term partner ADB is ready to provide further support. It is a positive development that the government has reached a staff level agreement with the IMF. I am very much confident that the government is working on completing the necessary actions seeking financial assurances from other creditors and finalising the IMF program and after the IMF program is completed we consider to join by providing additional financial resources, he said,

Asakawa said in 2020, Developing Asia and Pacific saw its first contraction of economic growth in nearly six decades. Although the economies are in recovery, the outlook has started to worsen. This is due to growing challenges such as the impact of the Russian invasion of Ukraine, stronger-than-expected monetary tightening in advanced economies, and the sharp exchange rate depreciation and financial instability that may result.

“We have revised down our growth forecasts for 2022 from our projections in April from 5.2% to 4.3%, and from 5.3% to 4.9% for 2023 and the ADB is working to support our developing member countries through these challenging conditions in two crucial areas where we are focusing our support in addressing climate change and food security.”

He said that climate change remains a crucial issue for the region with Asia and the Pacific responsible for 50 % of global greenhouse gas emissions. And more than 80 % of the projected growth in coal demand will occur from Asia. The climate impacts on the region are distressing. Asia and the Pacific is experiencing climate shocks and stresses. There have been devastating floods, droughts, cyclones, and heat waves.

“We see its effect on livelihoods, food and water security, and the health of millions of people. We know that the battle against climate change will be won or lost in Asia and the Pacific. And the region must act urgently to decarbonize energy systems and other sectors and to invest in climate adaptation.”

In response, ADB is fully committed to its role as the Climate Bank for Asia and the Pacific and has raised climate financing ambition to $100 billion between 2019 and 2030. The ADB has withdrawn from financing new coal-fired power plants and introduced the Energy Transition Mechanism (ETM) to accelerate the retirement of existing coal power plants, and to promote a shift to clean energy while ensuring a just transition. ADB is also scaling up support for climate adaptation. He said food insecurity is threatening to reverse decades of development progress in Asia and the Pacific. Many factors are contributing to the worsening situation. “We also have to keep in mind that the current food security crisis will get even worse if we fail to address climate change. Floods, droughts, heat, disease, and other factors affected by climate change will have an impact on food production. Disruptions to livelihoods will drive even more food scarcity, compounded by climate-induced migration. In light of the growing urgency surrounding food insecurity in our developing member countries, we have made this issue a top priority. And I am announcing that ADB will provide $14 billion in support from 2022 to 2025 to address food security. Our response will be comprehensive, bringing into focus both the immediate and long-term aspects of food security.

“First, our support to food security issues is integrated across our operations, both in sovereign support and support to the private sector. This year, we expect to finalize commitments totaling about $3.3 billion. In our sovereign operations, we are repurposing funds from selected projects and strengthening countercyclical support in a number of countries for a total of approximately $1 billion. We also have at least $1.5 billion in our project pipeline related to agriculture, natural resources, and rural development.

With the private sector, we are supporting trade and supply chain finance, and we are providing financing to agribusiness and to farmers. ADB’s lending to financial institutions will also support food and agriculture small and medium enterprises. Private sector support from ADB resources is expected to reach $800 million in 2022. Elaborating on plans for 2023-2025 he said food security requires food systems that are resilient and their continued support for agriculture, natural resources, and rural development will contribute to this. The ADB Chief said they have programmed up to $10.7 billion in additional commitments from 2023-2025 and are adopting three strategies to build stronger, more sustainable, and equitable food systems.

“First, we are scaling up our climate mitigation and climate adaptation investments across the entire food and agriculture value chain. This includes support to strengthen participation of smallholder farmers and women in building the resilience of agricultural communities. Second, we are promoting digital transformation initiatives. These will improve the efficiency of agricultural production and value chains, including fisheries and livestock. Third, we are promoting nature-based solutions. This includes our work to develop innovative financial instruments to attract capital that will build environment-friendly food systems, and to promote more balanced diets,” he added.

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