Commercial Cofinancing

The primary objective of ADB’s Guarantees and Syndications Unit is to assist developing member country (DMC) governments and private sector borrowers in securing debt financing on commercial terms for ADB projects through engagement with commercial financial institutions.

To catalyze capital flows into and within its DMCs, ADB extends guarantees for eligible projects that enable financing partners to transfer to ADB certain risks that they cannot easily absorb or manage on their own. ADB also mobilizes additional debt resources for financing through loan syndication.

Commercial cofinancing supports ADB’s developmental objectives by facilitating investment, trade, and capital flows into DMCs.

Main products

Benefits

For borrowers (DMCs and the private sector)

For cofinancing partners  (shareholders/investors)

Role of commercial cofinancing

ADB plays an active role in identifying and arranging commercial cofinancing for its projects or programs. Examples of such assistance include:

Direct participation requirement

ADB’s commercial cofinancing products are, in general, only used to support projects or sectors in which ADB has some direct participation. Any ADB financing instrument can be used to fulfill this requirement, including project loans, program loans, multitranche facilities, sector loans, sector development programs, equity investments (for private sector projects), project grants, and technical assistance grants. For ADB’s B Loan, a direct ADB loan is required in the project to fulfill ADB’s direct participation requirement.

 

 
This page was generated from http://www.adb.org/site/private-sector-financing/commercial-cofinancing on 05 September 2015