Disbursement Procedures

under ADB Guidelines

Deb Kumar Dwibedi
Project Financial Management Specialist
BTA Consultants, Gangtok Tourism Project
ADB Loan : 2578- IND
 References
• Loan Disbursement Hand Book, 2007
• Loan Agreement
• Project Agreement
• Draft Project Administration Memorandum
(PAM)
 Important dates
 The Approval Date :16th November, 2009. This date is used for
determining Loan amortization schedule.
 Signing Date : 4th October, 2010. Commitment charges start on the
60th day after Loan signing date (Para 2.03 of Loan agreement).
 The Effective Date : 90 days after signing of loan agreement
(Section 5.01 of the Loan agreement)
 Project Completion Date : ( 15th September, 2014. Para3 –Schedule
1 to Loan Agreement) :Project is considered physically completed
 Loan Closing Date : 15th March, 2015. The date ADB may terminate
the right of Borrower to make withdrawals unless extended
subsequently.
 Pre conditions for disbursement
Loan agreement to be declared effective by ADB.
Authenticated specimen signatures of persons authorized
to sign withdrawal application are sent to ADB.
Specimen signature of authorized signatory to sign claims
to reach Aid Accounts & Audit Division, ministry of Finance,
GoI
Procurement procedure as laid down in the agreement
are followed.
Copy of Contract document forwarded to ADB.
 Suspension of Withdrawals
 Non Payment of principal, interest or any
other charge which GoI is required to pay as
per agreement.
 Non performance of any obligation under
the Loan or project agreement including
submission of Audit certificate by the
prescribed date to ADB viz 30th September
unless further extension is agreed upon by
ADB.
 Misrepresentation by borrower or Project
Implementing Agency.
 2578-IND -South Asia Tourism Infrastructure
Development Project – India portion
Category Description ADB Share Governme Total (USD % share of
(USD Mn) nt of Mn) ADB
Sikkim Financing
Share
( USD Mn)
Civil works 15.00 4.36 19.36 77.5
Equipments, Vehicles & 2.78 0.50 3.28 84.7
Furniture
Training/Fellowship 0.22 0 0.22 100
Consulting services 2.00 0.33 2.33 85.8
Incremental Administration 0 0.78 0.78 0
& Land
Financing Charges including 0 2.03 2.03 0
Interest and Commitment
Charges
Total 20.00 8.00 28.00
 Ineligible expenditure
• Taxes and Duties : Sales Tax/ VAT, Service Tax,
Custom Duties/ Excise Duty * etc.
• Land Costs
• Insurance Premium
• Not directly related to the project.
* Custom/ Excise duties are exempted as per
notification of the Govt. of India for ADB
funded Projects
Raising of Claims
• If found OK, Release the
Fund, Otherwise return to
ADB PIMU through CAAA
• Process the Claim

• If found OK, send to ADB

for release. Otherwise
CAAA, MoF, GoI return to PIMU
• Process the Claims.

• Send to CAAA
PIMU,DoT,Sikkim • Prepare Claims in proper
forms
 Release of Funds
ADB releases Fund for proper Claims
Advises CAAA PIMU can track from LFIS,ADB

CAAA advises PF-I section in MoF, GoI to release fund to respective state
PF-I issues release order Fund transferred to State Government

FD in the Government of Sikkim transfers the fund to PIMU through the DoT

DDO in PIMU has to draw the Bill Treasury issues cheque

 Disbursement Procedures
• Direct Payment procedure :- ADB at borrowers request pays a
designated beneficiary (Contractor/Consultants) directly. USD
1,00,000 and above.
• Commitment Procedure :- ADB at borrower’s request provides
an irrevocable undertaking to reimburse a commercial bank for
payment made to a supplier against a Letter of Credit.
• Imprest Fund Procedure :- ADB makes an advance disbursement
for deposit to an Imprest a/c for ADB’s share of expenditure.
• Reimbursement Procedure :- ADB pays to borrower’s / project
A/c for eligible expenditure, which has been incurred by project
out of its own budget/resources.