Regional: ASEAN+3 Regional Guarantee and Investment Mechanism Phase 2

Sovereign Project | 39313-012

Summary

The TA aims to conduct in depth study on a draft business model of the credit guarantee and investment mechanism (the Mechanism) and feasibility of the preferred organizational options. The TA will also prepare a draft business model and plan for the Mechanism. The TA will be composed of two parts. The first part, Phase 2 A will thoroughly assess the three options of (1) a new independent Multinational Development Institutions (MDI) structured on a standalone basis, (2) an MDI structured as a subsidiary or affiliated with ADB, and (3) expansion of the existing facilities of ADB as has been identified in the previous study, RETA 6127 (Phase 1).

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Project Name ASEAN+3 Regional Guarantee and Investment Mechanism Phase 2
Project Number 39313-012
Country Regional
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 6373-REG: ASEAN+3 Regional Guarantee and Investment Mechanism Phase 2
Technical Assistance Special Fund US$ 200,000.00
TA 6373-REG: ASEAN+3 Regional Guarantee and Investment Mechanism Phase 2 (Supplementary)
Technical Assistance Special Fund US$ 400,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Partnerships
Private sector development
Sector / Subsector

Finance - Money and capital markets

Gender Equity and Mainstreaming No gender elements
Description The TA aims to conduct in depth study on a draft business model of the credit guarantee and investment mechanism (the Mechanism) and feasibility of the preferred organizational options. The TA will also prepare a draft business model and plan for the Mechanism. The TA will be composed of two parts. The first part, Phase 2 A will thoroughly assess the three options of (1) a new independent Multinational Development Institutions (MDI) structured on a standalone basis, (2) an MDI structured as a subsidiary or affiliated with ADB, and (3) expansion of the existing facilities of ADB as has been identified in the previous study, RETA 6127 (Phase 1). The first part of the TA will be composed of the following: (1) refining and tuning business volumes for each of business lines for these focus countries as PRC, Indonesia, Malaysia, Thailand and Philippines (2) re run the financial projection analysis (of three options as required) based on the refined and tuned demand projection (3) assessing the advantages and disadvantages of three options using such benchmarks as (i) self sustainability and triple A rating, (ii) organizational and management structure, (iii) good governance, (iv) maximizing the responsiveness and flexibility to the user demand, (v) impediments by legal and regulation restrictions, (vi) necessary fund mobilization, (vii) human resource mobilization, (vii) a project cost estimation, (ix) timeframe for the establishment and (4) narrowing down to one option out of three approaches. The Phase 2 A report will be prepared for the review and the discussion among member countries. If required by the co chairs and the member countries, it is suggested to conduct a consultation forum including the potential clients and market participants with the sufficient assistance and inputs by the co chairs and the member countries. Subject to the approval of the Working Group 2, the second part, Phase 2 B will create a business model and plan of the guaranty and investment mechanism. The TA will prepare a draft proposal containing sufficient information to support the investment assessment by member countries and Asian Development Bank.
Project Rationale and Linkage to Country/Regional Strategy
Impact

Support the policy dialogue of ASEAN+3 Asian Bond Markets Initiative (ABMI) Working Group (WG) 2 on Credit Guarantee and Investment Mechanism

(CGIM)

Increasing market attractiveness to potential bond issuers, ensuring smooth functioning of regional bond markets, and broadening and diversifying of the investor base

Project Outcome
Description of Outcome

Promoting regional cooperation for developing robust local currency bond markets in the region

Bridging the credit quality gap for bond issuance and providing credit enhancement to structured financing schemes

Streamlining organizational and regulatory procedures to bond market access

Enhancing transparency, corporate governance, higher disclosure standards

Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Assessment for identifying an organizational option for the CGIM

A draft business model and plan for the CGIM as a proposal for ASEAN+3 member countries

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services An international consulting firm will be selected and engaged composing of the following: 1. Financial market specialists (international, 3 person months in total) 2. Financial sector specialists (international, 6 person months in total) and 3. Project specialists (international, 4 person months in total). In addition, an individual consultant (national, 6 person months in total) will also be hired for technical support for this project.
Responsible ADB Officer Avonechith Siackhachanh
Responsible ADB Department Office of Regional Economic Integration
Responsible ADB Division Office of Regional Economic Integration
Executing Agencies
Asian Development BankNoy Siackhachanhasiackhachanh@adb.org6 ADB Avenue, Mandaluyong City 1550, Philippines
Timetable
Concept Clearance 03 Oct 2005
Fact Finding 11 Mar 2006 to 25 Mar 2006
MRM -
Approval 18 Dec 2006
Last Review Mission -
Last PDS Update 19 Apr 2010

TA 6373-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
18 Dec 2006 - 18 Dec 2006 31 Jan 2008 31 Dec 2010 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
600,000.00 0.00 0.00 0.00 0.00 0.00 600,000.00 18 Dec 2006 871,502.43

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