Singular Loan or Grant Agreement on a Specified Project
Project-specific cofinancing, or PSC, is a partnership focused on the financing of individual ADB projects. They can be in the form of loans, grants for investment, and grants for technical assistance. The PSCs make up the bulk of total ADB sovereign cofinancing. When the cofinancing is under ADB administration, ADB and its financing partners sign a cofinancing agreement. If ADB will not administer the cofinancing, they sign a memorandum of agreement.
In 2020, ADB mobilized $10.8 billion in loans and grants from partners, including the Global Funding Initiatives, for the PSCs. The bulk of this amount went to loan cofinancing at $10.3 billion. About $436 million went to grant cofinancing and $64 million to technical assistance. Multilateral partners cofinanced over half ($6.3 billion) of the PSCs, while bilateral partners cofinanced $4.6 billion. There were 71 PSCs in 2020, and 19 of these were in response to the COVID-19 pandemic.
ADB participates in, and accesses funds from, the Global Funding Initiatives where the International Bank for Reconstruction and Development acts as the trustee. These funds are designed for development projects or technical assistance. Developing members can access them through ADB. In 2020, ADB accessed $129.2 million from Global Funds for its developing members.
ADB’s PSCs grew by 107% from 2019 to 2020, driven largely by increases in the amounts of loan cofinancing and grant cofinancing for investment projects, which hiked up to 106% in 2019 to 161% in 2020. Responses to the COVID-19 pandemic took the biggest share in loan cofinancing, reaching up to $8.1 billion for 14 projects. Examples of these projects are the COVID-19 Relief for Women-Led Small and Medium-Sized Enterprises in Viet Nam, the Emergency Assistance for Fighting the COVID-19 Pandemic in Pakistan, and the COVID-19 Active Response and Expenditure Support Program in various countries across Asia.
The Asian Infrastructure Investment Bank was the overall largest provider of loan cofinancing in 2020, supporting 12 projects worth over $4.1 billion. Ten of these projects, totaling $4 billion, were in response to the pandemic. They include the COVID-19 Active Response and Expenditure Support Program in Bangladesh, India, Indonesia, Kazakhstan, Pakistan, and the Philippines, COVID-19 Emergency Response, and the COVID-19 Rapid Response Program. Japan was the largest bilateral provider of loan cofinancing, supporting 6 projects worth $1.8 billion. Australia, on the other hand, was the most significant bilateral provider of grants. It supported 13 projects worth $24.5 million.
By product type, source, and location, the PSCs for 2020 are as follows: