Cofinancing by the Numbers

ADB’s response to the impact of the COVID-19 pandemic was unprecedented in both speed and volume. Moreover, ADB’s convening power galvanized development partners to consolidate their resources in support of innovative funding platforms to rapidly address the seismic impact of the pandemic across the region.

  • Financing partners contributed a record $16.4 billion in cofinancing for sovereign and nonsovereign operations in 2020, up by 32% from 2019 levels. Two-thirds of these went to COVID-19 interventions.
  • Cofinancing generated from sovereign operations reached $11.1 billion, more than double last year’s $5.4 billion figure.
  • Nonsovereign cofinancing amounted to $5.3 billion, with short-term operations dominating at $3.1 billion.

2020 Commitments

Commitments in 2020 reached $31.6 billion from ADB’s resources (loans, grants, guarantees, technical assistance, and equity investments). In addition, ADB mobilized $16.4 billion in cofinancing.

ADB scaling up to face the challenge—Commitments from ADB’s own resources increased by $7.6 billion, or 32%, compared to 2019’s $24 billion. Likewise, cofinancing increased by $4 billion, also 32%, compared to 2019’s $12.4 billion.

More than half of resources targeted COVID-19 responses—A substantial portion of 2020’s commitments were geared toward helping developing members mitigate the adverse social and economic impacts of the COVID-19 pandemic. Of the $31.6 billion ADB resources, 51% or $16.2 billion supported COVID-19 interventions. Of the $16.4 billion in cofinancing, 66% or two-thirds, totaling $10.8 billion, went to COVID-19 responses.

Note: Technical assistance includes sovereign and nonsovereign operations.

Sovereign Cofinancing

Sovereign cofinancing is third-party funding that contributes to ADB outcomes. All ADB projects and technical assistance can be cofinanced, with details varying in terms of

  • how much control and responsibility ADB has for the project (i.e., full administration, partial administration, or no administration)
  • what terms apply (i.e., loans or grants)
  • whether it is for a specific project (project-specific cofinancing) or theme (trust fund activities)

Sovereign commitments reached $38.2 billion in 2020—$27.1 billion from ADB resources and $11.1 billion in cofinancing. This means that every dollar of ADB sovereign financing was accompanied by about 41 cents of cofinancing from partners.

Sovereign cofinancing for 2020 was more than double 2019’s levels and is the highest volume to date.

The devastation wreaked by COVID-19 upon country after country translated into higher demand for support from ADB member countries. Data shows that of the $11.1 billion sovereign cofinancing, $8.2 billion or 74% went to COVID-19 response. The support ADB and its partners were able to provide could be attributed to the following:

Flexible COVID-19 response modalities

ADB’s COVID-19 response modalities, among them the COVID-19 Pandemic Response Option or CPRO,1 offered flexibilities that allowed financing partners such as the Asian Infrastructure Investment Bank (AIIB) and the OPEC Fund for International Development (OFID) to contribute to budget support critically needed by governments where they could not in the past. Among such flexibilities were faster project processing time, adherence to the government’s response plan instead of the usual dialogue toward a policy matrix, and a release of funds in a single tranche. Such modalities allowed cofinancing of $4 billion from the AIIB and $120 million from OFID.

Redirection of previously committed partner funds

Some bilateral partners redirected previously committed funds to COVID-19 related operations. For instance, Ireland repurposed its 2020 contribution to the Irish Trust Fund for the Small Island Developing States to COVID-19 emergency response measures, the People’s Republic of China (PRC) earmarked $10 million for COVID-19 from the PRC Poverty Reduction and Regional Cooperation Fund, and Norway redirected its $5 million unused resources from the Pakistan Earthquake Fund to Pakistan’s emergency assistance loan.

New trust fund contributions from existing partners

Partners contributed significant funding to trust funds and special funding vehicles. For example, Japan provided $75 million to the Asia Pacific Disaster Response Fund and $75 million to the Japan Fund for Poverty Reduction’s COVID-19 window, the United Kingdom contributed $6.3 million to the Regional Malaria and Other Communicable Disease Threats Trust Fund, and Korea contributed $8.4 million to the Republic of Korea e-Asia and Knowledge Partnership Fund.

Mobilizing resources from new partners

ADB has actively explored collaboration with new and nontraditional partners. For example, ADB partnered with a Qatari private foundation Education Above All for a $40 million grant commitment toward ADB’s primary education projects, with a particular focus on out-of-school children. ADB also engaged with the Bill & Melinda Gates Foundation on approaches for vaccine development and deployment, the Bloomberg Philanthropies on opportunities for a sustainable and “blue” recovery from COVID-19, and the Rockefeller Foundation on sharing regional approaches to COVID-19 response, including discussions on models for smart testing in India and creating an enabling environment for the private sector.

Who cofinanced with us?

Bilateral partners involved in project-specific cofinancing account for approximately 41% of sovereign cofinancing commitments for 2020; multilateral financing partners account for 56%. Trust fund commitments account for roughly 3%. Concerning COVID-19 response, multilateral financing partners provided 59% of cofinancing and bilateral financing partners shouldered 41%.

2020 Sovereign Commitments by Cofinancier, Project-Specific Cofinancing vs Trust Fund (in $ million)

How was the funding spent?

In 2020, the sovereign resources mobilized from partners cofinanced 180 projects and technical assistance, including 32 loans, 35 grants, and 120 technical assistance.2

Nonsovereign Cofinancing

Private sector or nonsovereign cofinancing amplifies the impact of ADB’s private sector operations by attracting financing from other parties. Its value rests in its additionality and the partnerships that endure beyond the project cycle. It facilitates investment, trade, and capital flows into developing members.

Both private and public institutions provide nonsovereign cofinancing. The funds are usually sourced from financial markets and priced at commercial terms. Such arrangements are particularly effective for projects and programs that commercial partners would consider to carry too much risk without ADB involvement.

2020 Commitments

In 2020, cofinancing for ADB’s private sector (nonsovereign) totaled $5.3 billion, of which $3.1 billion was short-term cofinancing, $2.1 billion was long-term cofinancing, while cofinancing of private sector transaction advisory services amounted to $76 million.

More than half (21) of ADB’s 38 private sector projects had cofinancing from partners in 2020, a slight improvement from the 2019 figure of 19 out of 38.

Nonsovereign cofinancing products—including risk transfers, guarantees, and parallel cofinancing—can be categorized as short- or long-term. Long-term cofinancing products totaled $2.1 billion in 2020. Parallel cofinancing had the biggest share at 39%, followed by B loans at 24% and risk transfers at 21%.

For ADB’s short-term products under the Trade and Supply Chain Finance Program, the Trade Finance Program (TFP) supported 7,178 transactions worth $5.8 billion—including $3 billion in cofinancing—and this helped 2,114 small and medium-sized enterprises. This enabled the TFP to more than double the amount of trade it supports at any given time under its current $2.2 billion program limit. Deals supported by the Supply Chain Finance Program, on the other hand, amounted to $246.2 million, with cofinancing reaching $162 million. Of that, about $22 million were related to the pandemic and $144 million in cofinancing.

Additional Data

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