ADB to make available $200m for companies manufacturing medicines for COVID-19

MANILA: The Asian Development Bank (ADB) will make available $200 million through its Supply Chain Finance Programme for companies manufacturing and distributing medicines and other items needed to combat the novel coronavirus (COVID-19), said a press release issued by the bank on Thrusday.

Companies manufacturing and distributing products, including medicines and personal protective equipment, are increasingly strained as production and distribution ramp up to address COVID-19. 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 ADB’s Head of Trade and Supply Chain Finance Steven Beck. “We are looking to support companies that want to ramp up production and therefore need to engage suppliers.”

Given that a single pool of supply chain finance is typically used for a subsequent delivery over a period of 120–180 days, 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.

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The funds will be made available through ADB’s Supply Chain Finance Programme and provided to selected companies within weeks. ADB 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 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, China-based pharmaceutical distributor Jointown Pharmaceutical Group Co Ltd to support the continued supply of essential medicines and personal protective equipment.

 

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