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
11
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.

Under the commitment procedure, the Asian Development Bank (ADB), at the borrower’s

5:37 PM    


Description
8.1  Under the commitment procedure, the Asian Development Bank (ADB), at the
borrower’s
1
request, irrevocably agrees to reimburse a commercial bank for payments
made or to be made to a supplier against a letter of credit (LC). ADB’s commitment
procedure may not be used for cofinancier’s funds held by the cofinancier (Chapter 12).
8.2  ADB’s payment assurance under this procedure is limited to the amount available in
the loan account.
8.3  Under this procedure, the LC issued by the borrower’s bank (LC issuing bank) becomes
operative only if and when ADB issues its commitment letter to the advising or
negotiating bank.
8.4  A commitment letter issued by ADB under this procedure is irrevocable in the sense
that ADB’s obligation to make the disbursement from the loan account is not affected
by the suspension or cancellation of the loan.
Basic Requirements
8.5  A signed application (Appendix 8A) for issuance of a commitment letter in the form
ADB-CL is submitted to ADB together with a summary sheet (Appendix 8B) for the
commitment letter and the required supporting documents. A separate application is
required for each currency in which a commitment letter is requested.
Supporting Documents
8.6  Supporting documents to be submitted to ADB with the application for a commitment
letter include (i) a contract or confirmed purchase order, if not yet submitted earlier
to ADB; and (ii) a copy of the LC against which ADB’s commitment letter is requested
(see Section 4.29 for retention period of supporting documents). ADB will return
applications which do not meet the requirements.
Issuing the Commitment Letter
8.7  Upon approval of the borrower’s application for a commitment letter, ADB issues a
commitment letter (Appendix 8C
2
) to a commercial bank specified in the LC.