ADB to provide $200m on medical supplies to fight COVID-19

MANILA - The Asian Development Bank (ADB) said on Thursday that it will make available $200 million through its Supply Chain Finance Program for companies manufacturing and distributing medical supplies to combat the COVID-19.

The announcement came amid reports that companies manufacturing and distributing products, including medicines and personal protective equipment, are increasingly strained as production and distribution ramped up to address COVID-19.

The Manila-based bank said the support from ADB, working in partnership with commercial banks, will provide such companies in Asia and the Pacific with additional working capital to meet expansion and other requirements.

"The support will target companies in the supply chain that are critical to fighting the virus," said Steven Beck, ADB's 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," Beck said.

Given that a single pool of supply chain finance is typically used for a subsequent delivery over a period of 120-180 days, the ADB said the 200-million-U.S. dollar 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 ADB added.

According to the ADB, the funds will be made available through their 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 Feb. 7 to enhance detection, prevention, and response in China and the Greater Mekong Subregion; another $2 million announced on Feb. 26 to support response in all its developing members.