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 ADB assistance, the proposed recipient of ADB’s nonsovereign financing must be:
- established or operating in a developing member country (DMC); and
- majority owned by private entities (that is, more than 50% of its voting capital is held by entities that are not owned or controlled by the state or state-owned entities); or, if the proposed recipient is majority owned by public entities1/ (that is, more than 50% of its voting capital is held by entities that are owned or controlled by the state or state-owned entities), it must be a local government or other subsovereign entity, or a state owned entity that can contract and obtain financing independently from the related sovereign and that can sue and be sued.
1/ Residing in the same country as the recipient of ADB's nonsovereign financing.