Private Sector Finance

Approval Process

An application for assistance will be processed in six stages as follows:

1. We clear the concept
2. We establish the facts
3. We appraise the project
4. We negotiate
5. Our Board of Directors considers the project
6. We close the financial arrangements

Using the information provided, ADB will check whether the project satisfies three critical criteria:

• development impact of the project
• consistency of the project with ADB's relevant country and sector strategies
• value-added role of ADB

If the project meets the criteria, a concept clearance paper is prepared and submitted for approval internally.

Upon the approval of the concept clearance paper, the sponsors must commit in writing to pay for ADB's expenses in processing the project.

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A project team from ADB will proceed to conduct due diligence on the project and will visit the project site, offices of the sponsors, government agencies concerned, local and international financial agencies.

During this stage, the project team will review the following

Projects that appear to have a significant environmental or social impact will be required to present an environmental impact assessment as soon as possible. This report has to be circulated at least 120 days before the Board can consider the project. Use our guidelines and include resettlement aspects.

Sponsors will be required to shoulder the costs of legal, technical, and other experts that will be contracted to represent the lenders. The project team will confer with sponsors and other senior lenders on the appointment of counsel and advisers.

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The ADB project team appraises the project. During this stage, ADB will conduct an in-depth examination of the project, its sponsors, and the issues identified at the fact-finding stage.

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The ADB project team will discuss and negotiate the terms and conditions of ADB assistance with the advise of the legal counsel. The project team will finalize the term sheet.

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The proposed ADB assistance will be presented to the ADB Board.

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Once the Board has given its approval, the project can proceed to final documentation and financial closing. Then the ADB loan and/or equity investment can be disbursed, subject to compliance to the conditions precedents.