Cofinancing

Project Processing

Public Sector Project Processing

 

Project Preparatory Technical Assistance (PPTA)

PPTA Fact Finding

The initial phase of the ADB project processing cycle begins when a PPTA fact-finding mission obtains relevant project information in the field. An agreement is reached with the government on the terms of reference of the consultants, the work program, and the role and responsibilities of the agencies concerned with the PPTA project.

At this stage, ADB determines whether or not other funding agencies would be interested in cofinancing particular projects. If a positive response is received, interested agencies are asked to commit in principle to cofinancing the project.

PPTA Implementation

Consultants are engaged to undertake the PPTA under the supervision of ADB staff. Upon completion of the PPTA, the consultants usually submit a final report for review by ADB and the government concerned.

ADB usually presents the findings of the consultants' final report to a meeting of interested donors in the field.

Loan Processing

Loan Fact-Finding

The loan fact-finding mission assembles and analyzes detailed information on all important aspects of the proposed project and the ADB loan, such as technical, financial, economic, institutional, policy, and legal matters, as well as social dimensions.

The loan fact-finding stage provides a further opportunity for official cofinanciers to coordinate with ADB in defining their specific roles in a particular project.

Loan Appraisal

The appraisal mission completes a comprehensive assessment of all aspects of the proposed project, and firms up the preparation of all documents necessary for approval of the loan.

Potential cofinanciers may join ADB appraisal missions, subject to the DMC government's consent. This gives them additional firsthand knowledge of the project concerned.

A commitment to cofinance a particular project may be made at any time prior to completion of project appraisal. If no commitment has been made by that time, ADB initially finances its share of the project.

Loan Negotiations

ADB and the DMC borrower discuss and agree on the project data and implementation arrangements contained in the Report and Recommendation of the President to the Board of Directors (RRP) and on the loan documents.

Board Consideration

The final RRP and loan documents are circulated to ADB's Board of Directors at least 21 days before the loan is considered for approval.

Implementation

Project Implementation

This stage commences at loan signing and includes all activities required for the implementation of the project in accordance with ADB guidelines for procurement and project administration.

It is still possible for an official cofinancier to provide financing after the ADB loan has been approved. In this case, once all necessary cofinancing documentation is in order, ADB simply cancels the corresponding amount of its own loan.

Private Sector Project Processing

 

PSG's Review

The processing of private sector projects usually begins when project sponsors approach ADB with a request for financial assistance. ADB's Private Sector Group (PSG) initially reviews such requests.

Concept Clearance

If the information provided to ADB indicates that the project

• is prima facie technically, economically, socially and financially viable
• needs ADB to play a catalytic role in developing and financing the project; and
• supports ADB's strategy in the country or region where the project is to be located

a concept clearance paper is prepared and submitted to ADB's Management for approval.

Fact Finding

Shortly after concept clearance, a project team (the Mission) visits the project site, offices of the sponsors and other locations, if necessary. Project costs and project financing and implementation plans will also be reviewed. In addition, the need for cofinancing under ADB's Complementary Financing Scheme or guarantees will be critically assessed and alternatives examined. ADB's Office of Cofinancing Operations is responsible for ensuring that cofinancing is arranged in accordance with applicable ADB policies and procedures.

Appraisal

Next, the Mission undertakes appraisal of the project. Appraisal includes an in-depth examination of the project and its sponsors and the issues identified at the fact-finding stage.

Negotiations and Board Consideration

After negotiations of the terms and conditions of ADB's loan and/or equity investment, the internal documentation for the project is finalized and circulated to ADB's Board of Directors for consideration.

Financial Closing

Once Board approval is given, the project can proceed to financial closing.