Final disbursement.Preparation of WA(s) for final disbursement(s) of project loan
and tranche disbursement of a policy-based loan should be closely coordinated
between ADB and the borrower and/or EA, particularly if the remaining unutilized
balance is expected to be fully utilized.
4.17 Winding-up period.10
The borrower may make withdrawals from the loan account
for expenditures incurred on or before the loan closing date. Expenditures incurred
after the loan closing date will not be financed under the loan. ADB may allow up to
4 months after the loan closing date (i) for the borrower’s WAs to be submitted to ADB
for expenditures incurred on or before the loan closing date, and (ii) for the borrower
to fully liquidate expenditures incurred on or before the loan closing date. After the
winding-up period, WAs, including requests for liquidation, will not be accepted.
Extension of the winding-up period, on an exceptional basis, may be approved by ADB
(Section 4.14).
4.18 Within 2 months after the winding-up period for submission of documents, the
borrower should fully refund any outstanding imprest account balances to ADB. If the
borrower fails to fully refund such balances, ADB may, among other corrective actions,
decide not to allow the use of the imprest fund procedure under the borrower’s new
projects until such time as the refund is received.
4.19 Payment of final audit fees.If external auditor’s fees are financed by ADB, it is
best practice to pay the audit fee before the loan closing date after completing the
final audit (Section 4.15). When audit fees under a project need to be paid after the
closing date, special arrangements may be required for payment of the final audit fee
from the loan account. External auditor’s fees for the final fiscal year may be disbursed
from the loan account, under condition that (i) the borrower signs a contract for the
final audit prior to the loan closing date, and (ii) the contract is a lump-sum or fixedprice contract that requires completion
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of audit within 6 months after the loan
closing date. If the audit work cannot be completed during the winding-up period, and
the final audit fee will be paid through the escrow account, full supporting documents
should be attached to the WA (see Appendix 4D for more details).
4.20 Refunds.All refunds must be paid to ADB’s accounts at its depository banks with
payment details indicating (i) references such as loan number, (ii) description or
nature of the refund, and (iii) currency and amount of refund. The borrower and/or
EA should send advice to ADB’s Treasury Services Division (TDTS) and CTLA once
a refund is made.

reflected in the PAM and/or in an appropriate document.

8:52 AM    

the loan and WA number, amount applied for, amount paid, and reason for nonpayment
or partial payment.
4.11  For nonpayment or adjusted settlement of claims under the commitment procedure
(Chapter 8), ADB sends an advice to the negotiating or advising bank by authenticated
SWIFT or tested telex citing the commitment letter number, letter of credit (LC)
number, and reason for nonpayment or adjusted settlement. A copy of this advice is
furnished to the EA for information.
Capitalization of Interest, Commitment Charges, and Other Fees and Charges
4.12  If the loan agreement provides for financing of interest, commitment charge, and/or
other charges that may be charged by ADB during construction or implementation,
ADB withdraws from the loan account and pays itself the amounts due. If the loan
agreement does not provide for financing these items, all charges are settled in cash
as a part of loan service payment.
Changes during Project Implementation
4.13  Changes in cost, financing plan, reduction in counterpart funding, disbursement
arrangements, and changes in expenditures originally approved for ADB financing,
particularly with regard to costs covered under Appendix 4C of this handbook,
should be approved by the relevant director general or authorized director,
after the matter is consulted and agreed with CTLA and other relevant offices and
departments.
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The approved change should be reflected in the PAM and/or in an
appropriate document.
4.14  Changes in disbursement arrangements include, but are not limited to, the following:
ȕ the use of the statement of expenditure procedure (Section 9.17),
ȕ an upward change, establishment, or removal of the ceiling of the statement of
expenditure procedure (Sections 9.18–9.21),
ȕ the use of the imprest fund procedure (Section 10.4),
ȕ the use of subaccounts (Section 10.26), and
ȕ extension of the winding-up period (Sections 4.17–4.18).
Loan Account Closing
4.15  Project completion date and loan closing date.Projects are expected to be physically
completed by the project completion date, which is normally 6 months before the loan
closing date.
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8
See Project Administration Instruction (PAI) No. 5.02.
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Note for best practice: To be ready to close the loan account by the loan closing date, during the 6 months
between the project completion date and the loan closing date, the EA should ensure that (i) project
expenditures incurred are paid; (ii) project financial statements are compiled and audited; (iii) audit fees,
if any, are paid (Section 4.19); (iv) advance(s) to the imprest account are fully liquidated; and (v) any refund,
if needed, is returned to ADB.