What are the main stages of the project approval process for ADB’s private sector operations?
ADB will carry out preliminary fact finding on the project and sponsors using the information provided by the sponsors.
We will also assess the likely development impact of the project and what value ADB's participation will have on the project, the sector, or the country.
If the project meets our criteria, a concept review paper (CRP) is prepared and submitted to the Investment Committee (IC) for approval. Thereafter, a mandate letter will be signed between ADB and the project sponsors.
It is likely that ADB will charge a processing (or appraisal) fee and the applicant must agree to pay ADB out-of-pocket expenses for processing the project.
The concept review considers if the project is technically, economically, socially, and financially viable.
The concept review also assesses if the project supports ADB's strategy in the country, sector or region.
After the CRP is cleared by the IC, a project team from ADB will conduct due diligence on the project, including a visit to the project site, offices of the sponsors, relevant government agencies, and any proposed co-financiers.
The project team will review the economic, financial, and commercial viability of the project business plan, the legal and regulatory framework, and any impacts on people and the environment.
During due diligence, the ADB project team will discuss and negotiate the terms and conditions of ADB assistance.
The project team will finalize and negotiate the term sheet, which should be agreed by the borrower prior to seeking ADB management's final approval.
The project team will prepare the appraisal report and other internal documentation. These will be presented to the IC for final review.
Draft loan, guarantee, or equity documentation usually is prepared concurrently during the final steps of ADB's process.
Once the Investment Committee has endorsed the project, the proposed ADB assistance will be presented to the ADB Board of Directors. There is a 21-day mandatory circulation period for this review.
After Board approval, the project documentation can be finalized and signed.
Once all conditions precedent have been met (including receiving a no objection letter from the host country), then the ADB loan, guarantee and/or equity investment can be disbursed per the agreed terms.