ADB Operations Promoting Bilateral Mechanisms in Asia and the - PowerPoint PPT Presentation

ADB Operations Promoting Bilateral Mechanisms in Asia and the Pacific A Workshop on the Joint Crediting Mechanism Jakarta, 21 May 2015 0

The Asian Development Bank ADB was established by agreement of its member countries to foster economic growth and co- operation in the Asia and Pacific region, and to contribute to economic development of its developing member countries in the region, collectively and individually. Quick Facts  Established in 1966  Long-term ratings: − S&P: AAA − Moody’s: Aaa − Fitch Ratings: AAA  HQ in the Philippines  24 field offices in Asia  5 representative offices in Australia, Germany, Japan, the Philippines, and the USA  Over 2,800 employees ADB HQ ADB Field Offices 1

ADB’s LONG TERM STRATEGY 2

Framing ADB’s Long -Term Strategy: Strategy 2020 Since 2008, ADB’s operations have been guided by a comprehensive, long -term strategy Core Objectives  Inclusive Economic Growth  Environmentally Sustainable Growth  Regional Integration 50% of annual Key Drivers operations  Private Sector Development  Private Sector Development targeted by 2020 and Operations and Private Sector Operations  Good Governance and  Good Governance and Capacity Development Capacity Development  Gender Equity  Gender Equity  Knowledge Solutions  Knowledge Solutions  Partnerships  Partnerships Core Areas of Operation  Infrastructure  Environment (including climate change) 80% of annual  Regional Cooperation and Integration operations  Financial Sector Development  Education targeted by 2020 3

Strategy for Private Sector Development A multi-pronged approach to private sector development: ADB’s Private Sector Thrusts  ADB believes that a vibrant private sector − is essential to long-term economic growth, Support − advances employment , productivity and governments to new technologies, create enabling environments − through payment of taxes, enables for business governments to invest in public goods and services, including basic social services Fight Poverty  ADB supports private sector development in Asia Generate through complementary assistance to both opportunities Catalyze − governments, through its sovereign in ADB-financed private operations departments Public Sector investments projects − the private sector, through the Private Sector Operations Department ADB’s sovereign operations Private Sector Operations Department 4

PRIVATE SECTOR OPERATIONS The Private Sector Operations Department (PSOD) is ADB’s only department responsible for assistance to private sector projects. Our Mandate Infrastructure  formulate and implement ADB strategies for − Energy (incl. Power) direct assistance to the private sector − Transport  provide financial assistance to private − Telecommunications companies and government-owned firms on a non-sovereign basis − Water  mobilize funds for private sector activities, − Urban Infrastructure including loan syndications, partial risk guarantees, and partial credit guarantees Capital Markets & Financial Sector  invest in private equity funds for small and medium-sized enterprises (SMEs), − Banks microfinance, infrastructure, and clean energy − Nonbank Financial and water Institutions  monitor ADB’s private sector portfolio and − Private Equity Funds manage risk 5

How We Operate ADB’s private sector interventions are selected to maximize development impact. PSOD selects projects which  are aligned with ADB’s country strategy  pioneer innovative, replicable solutions  have wider sectoral / economic impacts  have strong poverty reduction elements  promote good governance  crowd others in (“catalytic”) private sector investors  deepen financial and capital markets  bring private sector rigor and management skills into public sector services  are bankable 6

Our Value Proposition Private sector partners benefit from ADB’s unique set of advantages. We provide …and a distinctive set of advantages our clients…  An Asian institution – ADB has long relationships with  Local companies most DMCs 1, and an established presence in key sectors  Multinationals  “One - stop shop” – loans, guarantees, equity  Banks  Investment funds  Closer to clients – ADB’s decision -making is in the region  State-owned  Risk mitigation – through structuring and enhancing enterprises credibility of borrowers/projects  Technical expertise – synergy with ADB’s sovereign operations …a comprehensive product suite  Experience in generally difficult market conditions  Loans  Equity investments  Guarantees  Cofinancing  Technical assistance Notes: (1) DMCs = Developing Member Countries 7

Overview of Private Sector Operations Department (PSOD)  PSOD undertakes private-sector, commercially-oriented investments across a wide range of industry sectors throughout developing Asia  We have a diverse financing toolkit to catalyze transactions that generate attractive financial returns and high developmental impact, including:  Concessional Capital  Debt  Technical Assistance  Equity  Guarantees  We invest across a variety of different modalities, including:  Project Finance  Corporate Finance  Private Equity Funds  Funding Programs (e.g., Trade Finance, Microfinance, Supply Chain Finance, etc.)  Our team includes approximately 160 professionals across 7 locations:  New Delhi  Manila (HQ)  Jakarta  Beijing  Almaty  Bangkok  Hanoi 8

ADB’s PSOD has a lengthy history of investing in its core sectors across emerging Asia Selected PSOD transactions approved between 2012 and 2014 Financial Markets Infrastructure n Banking n Renewables/Efficiency n Private Equity n Other Energy Kazakhstan n Transport/Water/ICT n Akmola Electricity Distribution Azerbaijan n Other Sectors RG Brands Agribusiness n Mongolia n Access Bank Azerbaijan n Khan Bank n DemirBank n XacBank and TenGer n Garadagh Cement Energy China Georgia n Clean Bus Leasing in the PRC Greenhouse Agricultural Development Adjaristsqali Hydropower n n Regional n Natural Gas for Land and River Transportation n TBC Bank Georgia n Asia Environmental Partners Fund II n Rural Smart Wastewater Treatment n Olympus Capital Asia Fund Urban and Rural Integration Water Distribution n Armenia OrbiMed Asia Partners II, L.P. n n Wastewater Treatment & Reuse STRICTLY CONFIDENTIAL n Sevan – Hrazdan Cascade Hydropower n Spice Value Chain Myanmar Tajikistan n Connectivity Infrastructure Development Access Bank n Yangon Urban Renewal and District Cooling n Pakistan Thailand New Bong Escape Hydropower n n Central Thailand Solar Power n Patrind Hydropower n NED Solar Power Rural Financial Inclusion and Dairy Growth Facility n n Provincial Solar Power n Zorlu Wind Power n Subyai Wind Power Laos n Nam Ngiep Hydropower India n ACME-EDF Solar Power Philippines n Axis and Yes Bank n Mactan-Cebu International Airport Terminal n Dahej LNG Expansion Phase III Philippine Investment Alliance for Infrastructure Fund n Sri Lanka Delhi Electricity Distribution n Cambodia n Hatton National Bank n Dewan Housing Finance Corp. n Akay Flavours & Aromatics n Nations Trust Bank Plc n Horticulture Cold Chain n Loan to ACLEDA Bank Plc India Agribusiness Fund II n Indonesia n NSL Renewable Power n East Jakarta Water Supply n Ocean Sparkle Ltd. Bangladesh n Indonesia Investment Finance Corporation ReNew Power n n Bibiyana II Gas Power n Rantau Dedap Geothermal Power n Hippocampus Rural Education PRAN Agribusiness n n Sarulla Geothermal Power Generation Off-grid Pay-As-You-Go Solar n Solar and Wind Power n 9 9

PSOD Sector Focus Infrastructure Environmental protection Catalyzing economic growth Developing sources of renewable and social equity via energy, energy and encouraging energy waste, water, transport, and efficiency telecommunications facilities Finance & capital markets Sustainable agribusiness Providing better access to Promoting environmentally higher-quality financial friendly food production, services across Asia’s processing, and distribution developing markets Education Health Building human capital Supporting private providers through the expansion of of high-quality and affordable basic and higher education health care services 10

PSOD provides a range of financing solutions to meet its clients’ needs  Direct loans: market-based pricing in major international and/or local currencies  B-loans: ADB acts as Lender of Record and administers the loan, but it is funded by 3 rd -party Debt financing  Unfunded risk participations: fronting arrangement with IFIs and/or commercial banks / insurers  Direct investments in enterprises and financial institutions through common shares, preferred stock, and/or convertibles Equity  Investments in private equity funds as a general partner (GP) or limited partner (LP)  Political Risk Guarantee (PRG): protection against political risks, including foreign exchange restrictions, expropriation, political violence and contract dispute Guarantees  Partial Credit Guarantee (PCG): protection against credit risks, including non-payment by the borrower of the principal and interest due  Attractively priced and structured capital via 3 rd -party concessional sources for targeted Concessional industries / geographies Capital Technical  Technical assistance funding for project preparation, capacity development, R&D, etc. Assistance 11 11