The Asian Development Bank (ADB) said it will provide $200 million through its Supply Chain Finance Program for companies in the region manufacturing and distributing medicines and other items needed to combat the coronavirus disease 2019 (COVID-19).
The multilateral agency said in a statement yesterday ADB, in partnership with commercial banks, will provide such companies in Asia and the Pacific with additional working capital to meet expansion and other requirements.
Companies manufacturing and distributing products, including medicines and personal protective equipment, are strained as production and distribution ramp up to address the pandemic.
“The support will target companies in the supply chain that are critical to fighting the virus,” said Steven Beck, ADB head of trade and supply chain finance.
“We’re looking to support companies that want to ramp up production and therefore need to engage suppliers,” he added.
Given that a single pool of supply chain finance is typically used for a subsequent delivery over a period of 120 to 180 days, the ADB said the $200 million facility could support more than $400 million of financing over the next 12 months.
Fifty-fifty risk sharing from partner commercial banks could boost support under the facility to $800 million over the same period, the agency said.
The funds will be made available through ADB’s Supply Chain Finance Program and provided to selected companies within weeks.
ADB said it is closely monitoring the impact of COVID-19 on trade finance and is in regular contact with client banks to assess whether additional support is required.
ADB’s response to COVID-19 to date includes $2 million announced on February 7 to enhance detection, prevention, and response in the People’s Republic of China and the Greater Mekong Subregion; another $2 million announced on February 26 to support response in all its developing members; and a CNY130 million ($18.6 million) private sector loan, signed on February 25, to Wuhan-based pharmaceutical distributor Jointown Pharmaceutical Group Co. Ltd. to support the continued supply of essential medicines and personal protective equipment.
