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p. 4 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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Eligibility for ADB Assistance

To be eligible for ADB assistance,the proposed investment should be in the private sector of a DMC and owned by local or foreign private sector entities.An enterprise owned jointly by private interests and the government of the DMC may be eligible for ADB assistance,provided the majority of its equity is privately owned and it is controlled by private investors.

When selecting projects to support,ADB favors those with strong, long-term economic benefits within its financial sector and infrastructure focus.This would include projects that cost-effectively supply basic needs and services for a wide segment of the population,projects that encourage technology and know-how transfer to DMCs,projects that expand the role of the private sector or improve the quality of private sector participation, and projects that play a key role in improving financial sector intermediation.Priority is given to improving the environment for private sector development.This favors projects that constitute an important step toward more effective privatization,for example by pioneering new contractual structures and promoting better risk sharing.Infrastructure projects that are part of a well conceived privatization strategy are clearly favored.ADB also favors projects that promote a better financial environment for the private sector by providing new sources of debt and equity financing and building institutions that promote more stable and liquid capital markets.Asian economies exhibit great diversity of circumstances and needs.Accordingly,ADB ’s detailed strategy varies by country,depending on each country ’s size,stage of development,and specific economic profile.Priority is given to sectors in which the country has a comparative advantage,and sectors and companies starved of capital due to market imperfections and relatively high levels of perceived risk. Developing more integrated methods to encourage,support and finance SMEs is a priority in many DMCs.Small infrastructure projects may be more feasible and appropriate than larger ones,in certain countries.With new developments in private sector microfinance,ADB ’s reach is being extended to even smaller companies and the financial institutions that serve them.

When evaluating projects,ADB ensures that the cost of the project is reasonable and the sharing of risks and rewards between stakeholders is fair for both the country and the sponsors.For projects where private sponsors are granted an exclusive concession or license to operate facilities or supply specific services,ADB prioritizes projects awarded on a competitive and transparent basis,with a framework for regulating tariffs based on sound economic principles.

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