Asian Development Bank

Applying to ADB for private sector funding

There is no standard form for applications. Make sure your application contains all the following information. There are 18 items on this list.

Summarise all the important points you will make in this proposal. Your executive summary should be no longer than two pages.

Explain what you want the Bank to do for you. Propose an equity, debt, or cofinancing arrangement.

1. Introduce yourself and your organization (as sponsor of this project).
2. State why you decided to undertake the project.
3. Briefly describe the project, including the implementation and operation philosophy.
4. Say how much support you have obtained for the project from government, lending institutions and investors.
   
5. Explain the difficulties of implementing the proposal without ADB support.

Present a feasibility study establishing the technical, financial, economic, and environmental viability of the project, prepared by a reputable consultant.

1. Give the background of your organization.
2. Describe your organization's experience in project development in your home country and overseas, particularly in developing countries.
3. Give your organization's financial history. Include audited financial statements for the last three years, financial plans and projections, and copies of any recent filings with securities commissions for issuance of debt and equity.
4. Explain the ownership structure of your organization.

(There are 14 more items on this list.)

Describe the proposed ownership and management structure of the project. Include all the following:

1. the legal, tax, and other advantages of the proposed structure
2. responsibilities and accountability of the proposed management
3. cost and incentive structure for contractual arrangements with any separate management company.

Describe the project in detail, including its location, major components, sources and quality of inputs for operation, and level of technology.

Explain the implementation and contractual arrangements for the project, including the construction and supervision methodology.

Make sure you include all the following:

1. a bar chart showing major scheduled achievements and completion for each of the major components of the project
2. draft construction contracts
3. sources of possible cost increases and delays
4. your support arrangements for any cost increases and delays
5. detailed description of liquidated damage provisions and performance bond requirements.

Describe the operational arrangements for the project. Include all the following:

1. contractual agreements
2. availability and training of operational staff
3. expected efficiency levels of operation
4. incentive and penalties for performance
5. maintenance plans
6. reporting systems

(You're half way down the list of information to include in your application.)

Describe the market and marketing arrangements. Include all the following:

1. draft off-take concession and/or purchase agreements
2. credit-worthiness of customer(s)
3. current and projected markets (preferably from independent studies)
4. price sensitivity
5. market risks

Provide a site-specific environmental impact assessment report, highlighting environmental impacts and mitigating measures, prepared by an acceptable consulting firm in accordance with ADB's guidelines.

Provide cost estimates for the project, analyzed two ways:

1. major cost category
2. local and foreign currency cost.

In your cost estimates, detail taxes and duties, development expenses, working capital requirements, and interest during construction.

Describe the proposed financing plan and security package. Include details about all the following:

1. source, amount, currency, and terms of the debt and equity investments
2. source of finance for contingencies and cost overruns
3. escrow and retention arrangements
4. the terms, security requirements, and status of the financing commitments of other lenders
5. the proposed arrangements for disposal of ADB's equity stake
6. dividend policy and proposed restrictions on their payment

Provide financial projections for the project covering the period from financial closing through final maturity of the proposed ADB financing. Include all the following:

1. balance sheet
2. profit and loss
3. cash flow statements
4. detailed assumptions used to prepare the projections.

All these data should be included in the financial model so that sensitivities for changed assumptions can be readily calculated.

(Only four more items on this list.)

Calculate the economic and financial rates of return as well as return on the equity investment. These data also should be included in the financial model so that sensitivities for changed assumptions can be readily calculated.

Analyze the risks in implementing and operating the project with the accompanying mitigating measures showing which party will bear the risk and/or pay for the mitigating measures.

The risk analysis should be accompanied by a list of proposed insurance coverages for both implementation and operation of the project.

Provide two copies of the project's financial model: one on paper and one on a 3.5 inch floppy disk. Use an integrated model that can provide for sensitivity analysis of critical elements of the project.

List all permits and clearances required for implementing and operating the project, the issuing authority, and the date of issue or expected issue.

(End of list. This page lists all the mandatory information you must provide when applying for ADB assistance with your private sector project.)