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5. INSTRUCTIONS FOR DISBURSEMENT

Authorized Signatory

5.1 Each withdrawal application (WA) is signed by the borrower's duly authorized representative(s). In accordance with the Loan Regulations and loan agreement, the Asian Development Bank (ADB) requires the borrower's representative designated in the loan agreement to furnish sufficient evidence of the authority of the person(s) who will sign the WA, together with their authenticated specimen signatures (Appendix 4B). The evidence must reach ADB before the borrower submits the first WA.

Allocating Loan Proceeds

5.2 Items to be financed by ADB loans are usually grouped into cost categories. The loan agreement between the borrower and ADB presents the amount allocated to each category of project expenditure (normally, this is presented in "Attachment to Schedule 3" of the loan agreement). Reallocation from one category to another may be allowed unless prohibited in the loan agreement.

5.3 The allocation of loan proceeds to the various categories must be completed and inserted for all types of project loan agreements (including sector loans, unless the information necessary to complete the allocation is not available at the time of the approval). For financial intermediation loans, the allocation of loan proceeds may or may not be attached to the loan agreement.

Withdrawal Application

5.4 For all disbursement,[1] ADB must receive a WA in the prescribed form. A WA is a written request from the borrower[2] to ADB to disburse funds from the borrower's loan account. A WA consists of

• the application itself in letter form (Appendixes 7A, 8A, and 10A);

• summary sheet(s) for each cost category claimed (Appendixes 7B and 8B);

• supporting documents; and

• summary sheet(s) and supporting documents, which may be substituted by simplified documentation, if approved (Section 9.7-9.29).

5.5 The original of the WA signed by authorized representative(s) is submitted to ADB. Summary sheet(s) should indicate ADB's contract reference numbers (called procurement contract summary sheets [PCSSs]) (Section 5.11). Supporting documents, which may be photocopies, to be submitted to ADB for processing WAs are shown in the relevant chapters of this handbook.

5.6 Alterations on the WA must be initialed by the borrower's authorized representative.

5.7 For efficiency, the minimum value per WA is US$100,000, unless otherwise approved by ADB. The borrower is to consolidate claims to meet this limit under reimbursement and imprest fund procedures. ADB reserves the right not to accept WAs below the minimum amount.

Currency of Payment

5.8 In principle, disbursement and/or payment is made in the currency in which the cost of goods and services has been paid or is payable. For expenditures incurred in the borrower's currency (local currency), the amount requested in the WA must be in local currency. A separate WA is required for each currency of disbursement.

5.9 The amount paid is charged to the loan account, which is denominated in the loan currency. When the currency of payment is different from the loan currency, the amount paid is converted into the loan currency by ADB in accordance with relevant regulations.

Payment Instructions

5.10 To ensure prompt and secure remittance, the payment instructions should have the following details:

• full name and address of payee for proper identification of payment;

• full name and address of the payee's bank, which may include a banker or branch designation;

• SWIFT Bank Identifier Code (BIC) if the payee's bank is a member of SWIFT;

• payee's account number (mandatory);

• for payments to anywhere in Europe, the International Bank Account Number (IBAN) and the related SWIFT BIC of the payee's bank;

• if SWIFT BIC for the payee's bank is not available, the national clearing system code such as Fedwire Routing number (FW), CHIPS Universal Identifier (CH), UK Domestic Sort Code (SC), Australian Bank State Branch Code (AU), or German Bankleitzahl (BL) account number with the correspondent bank, where applicable;

• full name and address of the correspondent bank, if payment is to be made to a bank not located in the country of the currency to be paid; SWIFT BIC if correspondent bank is a member of SWIFT;

• if SWIFT BIC for the correspondent bank is not available, Fedwire ABA Number and CHIPS Participant Number for US dollar payments; and

• special instructions or references to facilitate payment or identification of payment, where applicable.

ADB's Contract Reference Number: Procurement Contract Summary Sheet Number

5.11 The borrower is responsible for managing its contracts in accordance with ADB's guidelines, and for maintaining records for all signed contracts in a contract ledger (Section 4.5). In principle, the borrower should obtain approval for contracts before requesting disbursements under the contracts. Disbursements are charged to the approved contracts and recorded in the contract ledger.

5.12 The PCSS number[3] is assigned by ADB for identifying a particular contract approved by the borrower and submitted to ADB under a particular loan. The PCSS includes the following:

• ADB contract number;

• date of contract approval;

• mode of procurement and/or consultant selection method;

• name of contractor or supplier;

• terms of payment and currencies of contract;

• price escalation clause (yes/no);

• total amount of the contract;

• amount to be financed by ADB; and

• ADB's disbursement percentage.

5.13 The PCSS number should be indicated on the summary sheet (Appendix 7B and 8B). To find the number, refer to ADB's monthly report named List of Contract by Executing Agency, which is available in the Loan Financial Information System (LFIS) or Grant Financial Information System (GFIS) website (Chapter 14).

Sample Forms of Withdrawal Applications

5.14 WA forms and summary sheets vary for different procedures (e.g., Appendix 7A for direct payment and reimbursement procedures, Appendix 8A for commitment procedures, and Appendix 10A for imprest fund procedures).

For the borrower's convenience, these forms can be downloaded from the LFIS/ GFIS website (lfis.adb.org).

  • [1] Except for capitalization of commitment and interest charges (collectively called financing charges) and administration fees, as applicable.
  • [2] "Borrower(s)" in this handbook refers to borrowers, recipients (of grants), and/or their executing agencies, unless the context requires otherwise.
  • [3] For financial intermediation loans, the equivalent of the PCSS number is the subloan number, which should be shown in the statement of expenditures for financial intermediation loans (Appendix 9C).
 
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