and Innovation Charles Boamah Vice President, FNVP Tunis - 12 June - - PowerPoint PPT Presentation

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ADF-13: Financing Capacity and Innovation Charles Boamah Vice President, FNVP Tunis - 12 June 2013 Tunis June 2013 Financing Capacity and Innovation Optimizing Financing Capacity 1 Innovating for greater impact 2 Tunis June 2013

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Tunis – June 2013

ADF-13: Financing Capacity and Innovation

Charles Boamah Vice President, FNVP

Tunis - 12 June 2013

SLIDE 2

Tunis – June 2013

Financing Capacity and Innovation Optimizing Financing Capacity Innovating for greater impact

1 2

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Tunis – June 2013

Optimizing Financing Capacity

1

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Tunis – June 2013

Maximizing the Fund’s capacity with a dual standard encashment schedule Major changes in the core assumptions of the ACC model

Merge donor and internally generated liquidity
Increase level of expected loan repayments
Increase level of expected MDRI Compensation
Additional ADB Net Income to cover part of the ADF share
f costs of return to Abidjan

Optimizing Financing Capacity

SLIDE 5

Tunis – June 2013

950 1018 1052 1032 1259 1381

Low Consolidation Transformation

First Rep. Meeting Second Rep. Meeting

+82 +241 +329

Revised liquidity framework translates into greater ACC impact for Donor contributions

Improving Level of ACC

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Tunis – June 2013

African Infrastructure Development Index

Differentiation

f Lending

Terms

Differentiating Lending Terms

including GNI pc

UNDP Full HDI

Revised Index

(ADF-only countries)

AHIDI Index

50/10 => 40/10 61% concessionality

ADF Regular

50/10 => 40/5 51% concessionality

ADF Advance

30/8 => 30/5 35% concessionality

ADF Blend Revised AHIDI is a better indicator of economic development and capacity to sustain debt New terms compliant with Debt Sustainability Framework Concessionality above or equal to other MDBs

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Tunis – June 2013

Differentiation and new lending terms have limited immediate impact, but will significantly increase the ACC from ADF-16 onwards 1,01 1,03 2,19 2,63

0,50

1,00 1,50 2,00 2,50 3,00 Current Terms AHIDI Differentiation

ACC Level +37%

In Billion UA

ADF-13 ADF-16 ADF-13 ADF-16

Financial Impact

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Tunis – June 2013

UA 7,567 million Indicative Operational Program

3787 4027 4944 5442 2007 1032 1259 1381

1 500 3 000 4 500 6 000 7 500

Subscriptions ACC

(In Million UA)

ADF-13 IOP ADF-12 Low Consolidation Transformation

ADF-13 Financing Scenarios

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Tunis – June 2013

Item for Decision Accepted Proposal

Exchange rate reference period February 1 to July 31 2013 Standard Encashment Calendar 10 Year as in ADF-12 Accelerated Encashment Revised Framework Additional measures to enhance financial sustainability Accelerated repayment clause and voluntary repayment framework ADF Lending Terms Reduce maximum maturity of ADF- Loans from 50 to 40 years, with 10 years of grace period. Principle of differentiating ADF-only countries

What Deputies agreed to in February

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Tunis – June 2013

Item for Decision Proposal

Replenishment Technical Gap 5% Encashment Schedules Dual Standard Encashment Schedule Advance Commitment Capacity Revised Core Assumptions Differentiation and revised lending terms Revised AHIDI index Regular : from 50/10 to 40/10 Advance : from 50/10 to 40/5 Blend : from 30/8 to 30/5 Indicative financing framework Low: -18% real growth over ADF-12 Consolidation: 0% real growth over ADF-12 Transformation: 10% real growth over ADF- 12

What do we expect from Deputies today?

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Tunis – June 2013

Innovating for greater development impact

2

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Tunis – June 2013

Assist LICs with low risk

f debt distress and

adequate debt management capacity to access capital markets Guarantee against the risk of sovereign default No set aside, financed through PBA allocations (25 %)

UA 600 million investment

ADF Guaran- tee ADF

Leverage

UA 75 million PBA Deducted UA 300 million Guarantee

Invest- ment

Multiplier

4 X 2 X

ADF Partial Credit Guarantee

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Tunis – June 2013

Separate autonomous legal entity Credit enhancement to the ADB on a portfolio of transactions in LICs Extends ADB’s ability to mobilize additional private investment in LICs One off UA 165 million seed contribution

UA 3.3 billion additional LIC total projects investment

ADB Finan cing PSF

Leverage

UA 165 million seed contribution UA 660 million additional PSO

Additio nal LIC project s

Multiplier

4 X 5 X

Private Sector Facility

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Tunis – June 2013

Item for Decision Proposal Innovative financing Partial Credit Guarantee Private Sector Facility

What do we expect from Deputies today?

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Tunis – June 2013