Private Sector Finance

Loan Terms

Because ADB does not intend to compete with other sources of financing, whether local or foreign, it cannot be the largest single investor in an enterprise. If needed, ADB can help mobilize additional debt from other financing institutions in the form of parallel financing or syndication arrangements in which ADB acts as lender of record and banks take participation in the loan. It may also provide guarantees to commercial financial institutions.

Exposure limits for a single borrower, investee, or other counterparty in an ADB nonsovereign financing are as follows:

• For loans and guarantees representing in effect the same risk as that of the loan:
• $250 million, or
• an amount equal to 25% of total project cost, in the case of a limited recourse project financing, or total assets of the relevant borrower, in the case of a corporate loan, provided that in the event project costs or total assets, as the case may be, are less than $50 million, the amount under (ii) shall be equal to 50% of such projects costs or total assets, respectively, whichever is lower;
• up to $400 million, or
• 70% of project cost or total assets, as the case may be, whichever is lower, provided that there is a guarantee from an entity with an international credit rating of A- or better for that class transaction.
• For guarantees not covered above:
• $400 million; or
• an amount equal to 40% of total project cost, in the case of a limited recourse project financing or total assets of the relevant borrower, in the case of a corporate loan, whichever is lower.
• For equity investments:
• $75 million; or
• 25% of the aggregate issued share capital of the investee at the time of ADB’s commitment to invest, whichever is lower.