Catalog

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p. 3 of 24 BACK | NEXT The Asian Development Bank Mobilizing Private Capital Assistance to Private Enterprises Eligibility for ADB Assistance Advantages of Working with ADB Extent of ADB Assistance Appraisal Criteria Loan Terms Security Procurement Accounting and Auditing Arrangements Corporate Governance Environmental Considerations Role of ADB in Supervising Investments Risk Principles for Investment Funds Sale of ADB Equity Investment Commercial Cofinancing Complementary Financing Scheme Guarantees Export Credit Agency Cofinancing Applying for ADB Assistance Processing Procedures Illustrative Private Sector Projects of ADB Contact Information

ADB’s Private Sector Operations: Catalyzing Private Investments Across Asia and the Pacific

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Assistance to Private Enterprises

ADB directly supports private enterprises,private equity funds,and financial institutions.Its traditional modes of financing are equity investments and hard currency loans.Equity may include preferred stock, convertible loans,and other forms of mezzanine financing.Loans may be cofinanced by commercial banks and other financial institutions.ADB has three credit enhancement products to facilitate such cofinancing:Comple- mentary Financing Scheme,Partial Credit Guarantee,and Political Risk Guarantee (see pages 11-14).ADB is also accustomed to working closely with export credit agencies (ECAs)and other official sources of parallel financing.More recently,ADB has explored various ways to more effectively mobilize local currency debt financing on terms suitable for financing long-term projects,thus reducing the risk for projects which are depen- dent on domestic sources of revenue.

ADB private sector operations focus primarily on two areas:financial sector and infrastructure.Financial sector or capital markets projects assist private financial intermediaries in diverse sectors including banking, leasing,venture capital financing,merchant banking,microcredit,small 2.and medium enterprises (SMEs),private equity funds,mutual funds, insurance,securitization,credit enhancement,and credit rating. Infrastructure includes telecommunications,power and energy,water supply and sanitation,ports,airports,and toll roads.Projects may involve various forms of risk-sharing and ownership arrangements including build- own-operate (BOO)and build-operate-transfer (BOT)structures. Infrastructure also includes social sectors such as health care,education, and services to government agencies.ADB is increasing its support for human capital development since such investments are frequently the most effective way of breaking the cycle of intergenerational poverty.By supporting efforts to improve policy and institutional arrangements,ADB will help ensure that the poor have access to essential social services.ADB does not focus on private industrial or agribusiness projects,but may consider them if they have links to core capital markets or infrastructure sectors and have special economic merit.Appendix 1 gives examples of ADB-financed private sector projects.

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