Asian Development Bank

Procedures for loans to negotiated private sector projects

We follow these procedures when considering a loan to a private sector sponsor who wins a contract through negotiation, not through competitive bidding.

See also an explanation of our policy on competitive bidding and negotiation.

Excerpt from the 'Guidelines for Procurement under ADB Loans' (February 1999)

I. Procurement Under Private Sector Loans without Government Guarantee

3.10 In the case of loans made by the Bank to the private sector without government guarantee, the Bank does not insist on international competitive bidding procedures, but will request borrowers to satisfy the Bank that procurement procedures have been applied in a transparent manner, preferably through competitive bidding procedures, and that the goods and works procured are from eligible member countries and are suitable for the project.

3.11 Where the Bank is participating in financing a BOO/BOT/BOOT or similar type of project, either of the following procurement procedures shall be used:

1. the project sponsor for a BOO/BOT/BOOT or similar type of project shall be selected in a transparent manner, preferably through competitive bidding procedures acceptable to the Bank, which may include several stages in order to arrive at the optimal combination of criteria for the purpose of establishing the most economic and efficient proposal, such as the performance specifications of the facility offered, the cost charged to the user or purchaser, and the period of the facility depreciation. The project sponsor selected in this manner shall then be free to procure the goods and works required for the facility from eligible member countries, using suitable procedures; or,

2. if the project sponsor has not been selected in the manner set forth in sub-paragraph (a) above, the goods and works required for the facility and to be financed by the Bank, shall be procured from eligible member countries in a transparent manner, through competitive bidding procedures acceptable to the Bank.

BOO = Build, Own, Operate.
BOT = Build, Operate, Transfer.
BOOT = Build, Own, Operate, Transfer