BAKU, Azerbaijan, May 5 (UPI) -- The Asian Development Bank said it is overhauling grants and loans and working closely with the new Asian Infrastructure Investment Bank, or AIIB.
The statement was made during the ADB's annual meeting that began May 2 in Baku, Azerbaijan, Bloomberg reported.
According to the Japan-led development bank, the regional institution plans to revamp a four decade-old development fund. Loans and grants are to be expanded by 50 percent to as much as $20 billion.
In what it called a "groundbreaking" move, the ADB said it would combine lending supervised by its Asian Development Fund with its ordinary capital resources balance sheet.
That merger will take place in 2017.
Japanese news agencies Jiji and Kyodo reported ADB President Takehiko Nakao said the bank's latest decision "has nothing to do with AIIB."
According to a statement issued by ADB, Nakao and Jin Liqun, the interim secretariat of AIIB, met on Friday and agreed to "work together for Asia."
With the arrival of AIIB, Nakao said his bank plans to engage in co-financing projects with the China-led bank.
About 80 percent of ADB projects are related to infrastructure, Nakao said.
Wai Ho Leong, a Singapore-based economist at Barlcays Plc said there is "sufficient room for both [banks]."
"Now that the China-led AIIB is becoming a reality, the Japan-led ADB wants to ensure that it will still remain a key funder for infrastructure programs in less developed Asia," he said.
Asian countries have benefited from ADB funding in the past, and the bank is led by Japan and the United States.