TOKYO, Japan ? (UPDATE) The Asian Development Bank (ADB) plans to raise the cash available for lending to countries hit by the world economic crisis by tripling its capital base to $165 billion.
The announcement by Japan's Finance Ministry follows Japanese Prime Minister Taro Aso's proposal of a capital increase for the ADB when leaders of the Group of 20 big economies met in Washington in November to discuss steps to overcome the crisis.
The ADB seeks to hammer out an agreement among its 67 shareholder countries on the capital increase, its biggest ever, at its annual general meeting in May on the Indonesian island of Bali.
"We have presented them with various scenarios to consider and it's really up to them to discuss," ADB spokeswoman Ann Quon said about the capital hike proposal to shareholders.
"Obviously, we'd like to have as much as possible," she said, without confirming the amount of capital hike sought by the bank.
The last time the ADB increased its capital was in 1994 when shareholders agreed to double its general capital. That was its fourth hike since the bank was established in 1966.
The Manila-based ADB's authorized and subscribed capital stood at $55.2 billion at the end of last September, with Japan and the United States ? the two largest shareholders -- each with a stake of 15.6 percent.
The bank helps its developing member countries to reduce poverty by making loans mainly to governments but also to some private enterprises. Last month, it approved a loan of up to $400 million for a road system in the highlands of Papua New Guinea.
The capital increase was first discussed at the bank's annual meeting in Madrid last year.
"If we don't get an increase in our general capital, then it would be very difficult for ADB to be able to respond to the growing and urgent needs of our borrowing member countries for funds for their own development, and that is why we want to see completion by May," Quon said.
The global financial turmoil has highlighted the bank's need for additional capital to ensure it could continue to lend to members seeking to spend more to support their economies.
"Clearly, the financial crisis has shown that there is increased demand among our borrowing member countries for more resources," Quon said, adding Vietnam and Pakistan, among others in South Asia, have asked the bank for increased funding support.
The ADB has said Asian countries would continue to post the fastest growth worldwide this year despite the financial crisis, although Hong Kong, Singapore, South Korea and Taiwan would be hit the most by spillovers from the turmoil.
The capital boost will help it cope with a possible outflow of global funds from emerging economies in Asia.
If shareholder countries agreed to triple the ADB's capital, Japan will likely contribute about 60 billion yen ($671 million) in cash and provide a line of credit as the rest of its contribution, the finance official from Japan said.