Australia and ADB: 54 years on, a partnership that keeps delivering results for the Asia Pacific
Article | 27 January 2020
- Australia is a founding member of ADB and one of its strongest and most reliable partners.
- Australia has contributed $2.8 billion to the Asian Development Fund, making it the third-largest donor.
- The impact of Australia's investment has been immense, from health services in Papua New Guinea to solar energy in Tonga and infrastructure in Nauru.
In 2020, Australia and the Asian Development Bank (ADB) are celebrating 54 years of cooperation, a period that has delivered critical infrastructure, investment, and training to improve the lives of people in the Asia Pacific region. Now, more than ever before, the long-term development partners are committed to working together to help create an even more inclusive, resilient, and sustainable Asia Pacific region.
Australia has been, and is, a key partner of ADB. It is a founding member of ADB and the fifth largest shareholder. Since 1990, Australia has provided $172.6 million for 12 trust funds in Asia and the Pacific, helping to support clean energy, health, transport, education, business investment, and gender equality.
From 2018 to 2019, Australia provided $126.3 million for grants and technical assistance and contributed $16 million to two trust funds in the region.
To date, Australia has contributed about $2.8 billion to the Asian Development Fund (which provided concessional lending in addition to grant operations until the merger for concessional lending with ADB’s ordinary capital resources in 2017), making it the third-largest donor after Japan and the United States.
ADB’s Pacific portfolio
The Asian Development Fund, through initiatives to support small island developing states and countries vulnerable to natural disasters, particularly benefits the Pacific region.
Australia is a strong partner of ADB in the Pacific and is encouraging and facilitating ADB’s expanded presence in the region. This has seen ADB’s portfolio double every five years since 2005. At the end of 2019, ADB’s Pacific portfolio stood at $3.2 billion for 77 projects.
In 2019 alone, ADB committed $510 million in loan and grant financing to the Pacific from its own resources, and $221 million in co-financing, for 27 projects. To boost ADB’s field presence to facilitate aid coordination and aid effectiveness in the Pacific region ADB is opening offices in 13 of its 14 Pacific developing member countries (PDMCs), including in Palau where a new office was opened last week.
“Australia’s support of ADB’s expanding presence in the Pacific region is highly appreciated,” said Ms. Lotte Schou-Zibell, Regional Director of ADB’s Pacific Liaison and Coordination Office in Sydney. “The Australia-ADB partnership has been validated by Pacific governments, who return to ADB as their partner of choice and recognize Australia’s often leading role in making our support possible.”
Cofinancing with Australia has helped ADB build local capacities in the Pacific region by supporting donor coordination, portfolio management, and policy dialogue.
The objectives of Australia’s support for the Indo-Pacific region (Which extends from the eastern Indian Ocean to the Pacific Ocean connected by Southeast Asia, including India, North Asia and the United States) parallel those of ADB: to promote prosperity, reduce poverty, and enhance stability. In 2016, ADB and Australia reaffirmed their shared strategic priorities and commitment to keep working toward them through their 2016-2020 Partnership Framework on Development, which articulated their strategy to help alleviate poverty and improve living standards in the Indo-Pacific. The framework specified ADB and Australia’s shared objectives of promoting inclusive and sustainable economic growth; facilitating trade and investment, promoting international competitiveness, and supporting private sector growth and investment; and building public awareness of outcomes of the Australia-ADB partnership.
The Pacific Private Sector Development Initiative (PSDI)
Alongside its broad contribution to ADB, Australia also partners with the bank on a wide range of initiatives in the Pacific. The Pacific Private Sector Development Initiative (PSDI) was established in 2007 to help Pacific countries boost their business sectors and thereby promote inclusive economic growth. With more than 80% of its funding coming from Australia, PSDI has implemented more than 300 reforms that have made it easier for people in the Pacific to start and grow their businesses. These include laws and online registries that increase access to finance by making it easier for banks to accept movable property as collateral; online business registries that dramatically reduce the time and cost of formalizing a business; state-owned enterprise reforms that have doubled the profits of government businesses while delivering better, cheaper services and reducing market distortions; new competition policies, laws, and agencies that level the playing field and protect consumers; and integrated—as well as specific—actions to economically empower women. Australia recently committed another $14 million to continue PSDI through to 2024.
“Australia’s support of ADB’s expanding presence in the Pacific region is highly appreciated. The Australia-ADB partnership has been validated by Pacific governments, who return to ADB as their partner of choice and recognize Australia’s often leading role in making our support possible.”
The outcomes of PSDI-backed reforms are particularly evident in Papua New Guinea (PNG), where an integrated program of support made possible by additional Australian financing is reshaping the economy’s capacity to provide for the people of PNG, as well as opportunities for them to participate in the economy.
Other Australian co-financed projects in PNG are also having a big impact. The Rural Primary Health Services Delivery Project is upgrading rural health facilities and has established 27 community health posts in eight provinces and a digital public health data collection and information system. New facilities in Bulolo District Hospital and Mutzing Health Centre in Markham District, for example, helped deliver 802 births, facilitate 1,145 medical admissions, and service 114,800 general outpatient cases in 2019 alone. Meanwhile, the Sustainable Highlands Highway Investment Program is helping implement the government’s objective to rehabilitate, upgrade, and maintain 430 kilometers of the Highlands Highway.
In Tonga, since 2011, the Nuku’alofa Urban Development Sector Project, cofinanced by ADB and the governments of Australia and Tonga, has been delivering projects to improve living conditions and increase access to Nuku’alofa’s municipal services. This has included: the upgrading of water and sanitation services to provide efficient, sustainable, and disaster-resilient water supply and sewerage to the capital’s residents. Meanwhile, a Renewable Energy Project co-financed by Australia, ADB, and the Green Climate Fund is helping Tonga transition to renewable energy and provide energy security and access to people in the outer islands. The project is establishing new renewable energy plants, battery storage, and mini grids; promoting private sector investment; and building capacity to operate and maintain energy assets.
ADB and Australia continue to build an enduring partnership that is strong, effective, and transparent, and continues to evolve in response to the critical needs and opportunities in the region. Collectively, ADB and Australia’s scale of operations, technical expertise, experience, and partnerships allow the Asia Pacific region to better respond to development challenges and foster economic growth.
For inquiries, please contact Neil Hickey (Communications Specialist, ADB's Department of Communications) and Sally Shute-Trembath (Senior External Relations Officer, ADB's Pacific Liaison and Coordination Office in Sydney, Australia).