Project loan disbursements in the last 5 years (2008-2012) have averaged $342 million annually. For the same period, there is an increasing trend in contract awards for project loans, from $364 million in 2008 to $577 million in 2012 indicating the increasing average size of contracts (in the transport sector, from $0.2 million in 2002 to $9.7 million in 2010) and greater efficiency.
However, the percentage of projects with implementation challenges also increased, from 11.1% in 2011 to 15.8% in 2012. Prior to the spring cleaning, un-disbursed loan balances had been increasing, peaking at $3.24 billion in 2007, or 77% of the overall portfolio. As an understandable effect of spring-cleaning, un-disbursed loan balances have been declining every year since 2008.
The loan disbursement ratio for Pakistan improved during 2007-2012 (26.5%) compared with 2002-2006 (20.4%). For loan extensions, by no longer granting extensions automatically, the number of loans with extensions declined from 13 in 2007 to 9 in 2008, and was kept low at an average of 5 for the next 3 years. Prior to the spring-cleaning, the number of loans with approved extensions had increased from 10 in 2004 to 22 in 2006.
As a result of a large and scattered portfolio in the mid-2000s that was slow moving and poorly performing, ADB decided in 2007 on a thorough restructuring and rationalisation of the portfolio, or spring cleaning.
The spring-cleaning led to a substantial surge of loan cancellations and loan closures. Loan closures increased from 3 in 2006 to 23 in 2007 (many of these concerned loans that had started before 2002 and hence fell outside the scope of this evaluation). The number increased to 31 in 2009 but then dropped to about 10 in 2010 and 2011.
The spring-cleaning led to a significant slimming of the loan portfolio, with the number of active loans falling from 80 in 2006 to 42 in 2009 and 27 in 2012. The average size of ADB’s loans increased from $80 million in 2006 to $140 million in 2011, and then decreased to $136 million in 2012. By comparison, the World Bank had 30 active loans in 2012 with an average size of $167 million in education and infrastructure.