Annual Report 2007

Lending reached a record level of $3.2 billion for 17 sovereign and 6 nonsovereign loan projects (Table 35), almost 72% higher than the approvals in 2006. The sovereign loans include eight program loans for $1.6 billion to support the financial and capital market sectors, poverty reduction, development policy reforms, and local government financing.

ADB’s nonsovereign approvals in the region totaled $158 million (Statistical Annex 10). The nonsovereign loans include one project for the public sector, the first for the region, and five projects for the private sector in Cambodia, Indonesia, Malaysia, and Viet Nam.

Grants approved amounted to $144.3 million for 11 projects, with funding through the Asian Development Fund (ADF), cofinancing, and the Japan Fund for Poverty Reduction (Table 33). Technical assistance amounted to $30.1 million for 44 projects, including 7 supplementary ones, funded through the Technical Assistance Special Fund, Japan Special Fund, and cofinancing (Table 32).

Key measures were introduced to strengthen the accountability of administering units and quality control mechanisms. A management-driven monitoring system was put in place to raise the profile of and improve portfolio management work.

More attention was paid to broader structural issues affecting project performance, such as alignment of annual project work plans with government budget cycles. Systemic issues in project implementation were addressed through close collaboration with governments and development partners, and the role of resident missions was further enhanced.

The Declaration of Support for the Heart of Borneo was signed by Brunei Darussalam, Indonesia, and Malaysia, which all share Borneo Island. With support from the World Wildlife Fund, the initiative aims to conserve a total of 220,000 square kilometers of equatorial rainforest through a network of protected areas.

ADB also supported increasingly active engagement in the subregional economic initiative by the private sector, local governments, media, and other stakeholders of the Brunei Darussalam–Indonesia–Malaysia–Philippines–East ASEAN (Association of Southeast Asian Nations) Growth Area (BIMP-EAGA).

REGIONAL COOPERATION

ADB continued to lead in promoting regional and subregional cooperation. It participated in the 12th ASEAN Summit in January, and organized and participated in the first ASEAN Secretariat–ADB high-level consultation meeting held in June in Indonesia, which discussed the joint 2007–2008 work plan for implementing the ADB-ASEAN memorandum of understanding.

A regional cooperation operations business plan for the Greater Mekong Subregion (GMS) Program was completed and endorsed by Management in September.

A new Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) road map, prepared with ADB assist-ance, was endorsed by the Second IMT-GT Leaders’ Summit in January. ADB helped establish a permanent secretariat, the Center for IMT-GT Subregional Cooperation, in Selangor, Malaysia. The Third IMT-GT Leaders’ Summit, held alongside the ASEAN meetings in Singapore in November, commended ADB’s participation as a development partner and made three specific proposals for ADB assistance.

With ADB assistance, BIMP-EAGA greatly improved transport connectivity with the signing of three key transport agreements. ADB provided technical assistance (TA) for the ongoing effort to streamline customs, immigration, quarantine, and security procedures, and to harmonize border formalities in selected BIMP-EAGA ports and border crossings. It also processed TA for an environment program for the subregion to preserve its exceptional land and marine biodiversity. ADB increased its TA for the BIMP-EAGA economic initiative, from $700,000 in 2006 to close to $3 million in 2007 and 2008.

PORTFOLIO MANAGEMENT

As of 31 December, ADB had 155 ongoing loans and ADF grants (equivalent to 149 ongoing projects) in Southeast Asia, with a net loan amount of $10.5 billion, while the TA portfolio had 215 active projects with a total revised amount of $253.4 million. ADB, by the end of 2007, had achieved 99% of its annual projections for contract awards (for loans and ADF grants) and 105% of its disbursement targets (for loans and ADF grants).

Thanks to several key initiatives to improve port-folio management, ADB has maintained a single-digit projects-at-risk ratio in the subregion since 2005 (Table 34). A rigorous monitoring system with monthly meetings on TA performance and strict screening of TA extensions was instituted. Results-oriented country portfolio review missions were undertaken in Indonesia, the Philippines, and Viet Nam, all led by the resident missions.