Catalog

	Table of Contents
p. 26 of 32 BACK | NEXT I. Introduction II. Assessment of Past Performance III. Rationale and Role IV. Operational Strategy V. Operational Improvements A. Single Project Exposure Limit B. Providing for Smaller Interventions C. Conflicts of Interest D. Screening of Projects E. Streamlining of Business Processes F. Strengthened Risk Management G. Strengthened Management of Nonperforming Investments H. Private Sector Operations at Resident Missions I. Enhancing Technical Assistance for Private Sector Operations J. Active Outreach Marketing K. Establishment of a Financial Reporting System VI. Resource Requirements VII. Conclusions and Recommendations

Private Sector Operations: Strategic Directions and Review : V. Operational Improvements

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I. Enhancing Technical Assistance for Private Sector Operations

100. ADB’s existing policies and procedures permit TA to be provided for PSO⁶⁹ , although this has rarely been used. Specifically, project preparatory TA may be provided, on a selective basis, initially by grant, but with full or partial recovery when the TA results in an ADB operation.⁷⁰ Use of TA funds for PSO would enable PSG to pioneer in new countries and new sectors. Such TA may be justified where significant barriers to private sector involvement exist and sponsors are not forthcoming, or where this form of assistance will allow ADB to play a valuable demonstrative or catalytic role. This enhanced capability could, for example, facilitate the preparation of pilot projects in innovative areas or in new countries.⁷¹ Developing and designing such projects may be initiated by ADB, or conceptualized by sponsors who need seed money to prepare a feasibility study or finalize the project design. For instance, ADB has been requested to assist at the preparatory stage of interesting and deserving proposals that could bring the benefit of ICT to the DMCs. TA should be available to assist the promoters of these and similar projects, subject to reimbursement as and when the projects are successfully launched.

101. There are limits to the amount of resources that private companies can commit to nonrevenue generating, socially-oriented activities.⁷² Grant support may sometimes be required to encourage and broaden the scope of activities to directly address the needs of the poor. For example, an occupational training program for handicapped war victims has been proposed to be incorporated into a commercial project in Cambodia, enabling war victims to learn marketable skills. A similar program has been proposed for a hotel chain to train abused girls in catering and other hotel skills. Neither can be incorporated without grant funding. To address issues of eligibility of such activities for TA funding, careful analysis has to be made to ensure ADB's TA is used to finance expenditures that involve advisory and training services.

102. For these activities, PSO will have access to TA funds. In addition, there may be good potential for establishing donor-funded trust funds for TA in PSO. IFC, for example, has several such trust funds and uses them for project preparation advisory services and as “foundation-like” grants to support non-core elements that have direct poverty impacts. PSG would explore these possibilities in collaboration with the Office of Cofinancing.

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