Asian Development Bank to triple capital - Japan MOF

By Yuzo Saeki

TOKYO (Reuters) - The Asian Development Bank aims to triple its capital to about $165 billion this year to spur economic growth in the region by expanding its lending capacity, Japan's Ministry of Finance said on Wednesday.

The move comes after Japanese Prime Minister Taro Aso proposed a capital increase for the ADB when leaders of the Group of 20 major economies met in Washington in November to discuss steps to overcome the global financial crisis.

The ADB seeks to hammer out an agreement among its shareholder countries on the capital increase at its annual general meeting slated for early May, a Japan MOF official said.

The last time the ADB had a capital increase was in 1994. The bank's authorised and subscribed capital stood at $55.2 billion at the end of September 2008, with Japan and the United States each holding a stake of 15.6 percent.

"The ADB is now in a negotiation for a general capital increase and it's a matter to be approved by the board of governors representing 67 countries," a senior ADB official, who asked not to be named, told Reuters.

The official declined to confirm the amount of the capital increase but said the hike was necessary to give the Manila-based multilateral lending agency more ammunition to help its members.

"Unless we increase it, we will not be able to maintain the current level of operation in the coming year," the official said, adding the global financial turmoil has raised the need for additional capital to ensure the bank could continue to lend to members seeking to spend more to support their economies.

The ADB has said the region would continue to grow at the fastest rate worldwide this year despite the financial crisis, although Hong Kong, Singapore, South Korea and Taiwan would be hit the most by the turmoil.