As a catalyst for private investments, ADB provides direct financial assistance to private sector projects. While ADB’s participation is usually limited, it leverages a large amount of funds from commercial sources to finance these projects.
Projects must also have clear development impacts and/or demonstration effects that go beyond the benefits captured in the financial rate of return.
The Private Sector Operations (PSO) strategic framework demands a sharper focus on development impact, and emphasizes
- private sector participation in infrastructure and capital market development,
- broadening of country and sector reach,
- wider use of credit enhancement and other instruments, and
- strategic alliances with other development agencies.
Who is eligible?
To be eligible for assistance, the proposed recipient of ADB's private sector financing
- must be established or operating in a DMC;
- majority owned by the private sector (an entity with more than 50% of its capital held privately);
- or, in the case of an entity that is owned or controlled by the public sector (an entity with more than 50% of its capital held publicly); or
- it must be a local government or other subsovereign entity or a state-owned enterprise that can borrow independently form the related sovereign and that can sue and be sued.
Infographic: ADB and the Private Sector: An Effective Partnership