The Government today welcomed the approval by the Legislative Council's Finance Committee for Hong Kong to subscribe to the 5th General Capital Increase of the Asian Development Bank.

The funding includes a paid-in portion of $146 million to be paid over a 10-year period and a remaining callable portion of $4.514 billion which will constitute a contingent liability for the Government.

The bank is a multilateral financial institution for regional development with the principal goal of poverty reduction. It provides financial and technical assistance to governments for specific projects and programmes. By general capital increases, the bank replenishes periodically its authorised capital stock to ensure its lending activities can continue without disruption.

The Government said Hong Kong's continued subscription to the general capital increase is a clear demonstration of its continued support and commitment to the bank.

Being a responsible member of the bank and an international financial centre, Hong Kong should support this important initiative, which is largely in response to the call by G20 leaders to increase resources of multilateral development banks to support growth in developing countries amid the global financial crisis.

Hong Kong has benefited from the bank's lending programmes before. From 1972 to 1980, Hong Kong obtained five loans totalling US$101.5 million to finance infrastructure projects. All were repaid by 1987.

Hong Kong joined the bank in 1969 and subscribed fully to all four previous general capital increases in 1970, 1977, 1986 and 1994.