Regional: Master Plan on ASEAN Connectivity Implementation

Sovereign Project | 45076-001

A number of studies have highlighted the need for improving regional connectivity to support of economic development that transcends borders. However, the amount of resources required in improving regional connectivity to support economic development is significantly huge. Thus, prioritizing key projects and identifying alternative forms of financing will help address Asia's large infrastructure need.

Project Details

  • Project Officer
    Cyhn, Jin W.
    Southeast Asia Department
    Request for information
  • Country/Economy
  • Modality
    • Technical Assistance
  • Sector
    • Finance
Project Name Master Plan on ASEAN Connectivity Implementation
Project Number 45076-001
Country / Economy Regional
Brunei Darussalam
Lao People's Democratic Republic
Viet Nam
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8040-REG: Master Plan on ASEAN Connectivity Implementation
ATF - Cofinanced TA Funds US$ 975,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector

Finance / Infrastructure finance and investment funds - Money and capital markets

Public sector management / Economic affairs management

Gender Equity and Mainstreaming

A number of studies have highlighted the need for improving regional connectivity to support of economic development that transcends borders. However, the amount of resources required in improving regional connectivity to support economic development is significantly huge. Thus, prioritizing key projects and identifying alternative forms of financing will help address Asia's large infrastructure need.

The Association of Southeast Asian Nations (ASEAN) leaders endorsed the Master Plan on ASEAN Connectivity (MPAC) in 2010. The MPAC represents an in-depth plan of action based on (i) a list of priority projects for ASEAN connectivity, (ii) requirements for institutional and policy coordination, and (iii) recommendations for financing key projects. In 2011, , the ASEAN Infrastructure Fund (AIF) was established by ASEAN (excluding Myanmar) and the Asian Development Bank to provide an innovative financing instrument to address the ASEAN connectivity constraints and as a key driver toward realizing the vision for an ASEAN Economic Community by 2015.

Project Rationale and Linkage to Country/Regional Strategy In addition to the MPAC, a number of other ASEAN initiatives that promote infrastructure development exist, including those that are supported by ADB such as the ASEAN Infrastructure Fund (AIF). Based on equity investments from ASEAN and ADB, the AIF is designed to provide an innovative financing instrument to address the ASEAN's connectivity constraints. The AIF aims to support the MPAC toward realizing the vision for an ASEAN Economic Community by 2015. This technical assistance will provide complementary support to realize the AEC by (i) helping mobilize additional resources, (ii) providing due diligence support for projects and pipeline development, and (iii) conducting dialogues and consultations among stakeholders for consensus-building.
Impact Effective support for the implementation of the Master Plan for ASEAN Connectivity (MPAC)
Project Outcome
Description of Outcome Enhanced coordination among development partners for mobilization of financing for ASEAN infrastructure development consistent with MPAC implementation priorities
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

(i) Resource mobilization due diligence, including financial analysis of infrastructure financing initiatives ;

(ii) Project pipeline formulation and due diligence, and

(iii) Stakeholder consultation process for consensus building among ASEAN members on priorities for infrastructure financing

Status of Implementation Progress (Outputs, Activities, and Issues)

The Financing Agreement between ADB and the ASEAN Secretariat for the transfer and administration of the funds and implementation of the TA was signed in January 2013. TA funds were fully remitted on 6 February 2013. The TA was originally scheduled for completion on 31 December 2012 but was twice extended to until 31 December 2014 on account of the delay in the signing of the cofinancing agreement and the completion of diligence work for the projects supported under the TA. TA activities were completed on time.

A. Project Pipeline Development

The TA supported the initial screening of projects that are expected to contribute toward enhanced connectivity. The first project supported by the technical assistance is the Sumatra-Peninsular Malaysia High Voltage Direct Current (HVDC) Interconnection Project. ADB provided advisory assistance to validate the feasibility and eligibility of the project. The HVDC, along with Coal Fired Power Plant and Coal Mine Mouth projects in Sumatera, Republic of Indonesia, will transmit power to Malaysia expectedly starting in 2019.

To undertake preliminary analysis and due diligence, ADB engaged a team of consultants that comprises a coal power plant specialist, an environment, finance, and social experts and a public-private partnerships specialist. Specifically, the team is expected to review the financial and economic benefits of the HVDC, provide detailed financial and economic analysis, including the calculation of the financial internal rate of return; financial costs, and revenues, and assess the feasibility of financing the project through public-private partnerships. Discussions on other brownfield and other greenfield PPP opportunities with the relevant authorities and institutions are also ongoing. The initial study validated the project's viability and analyzed the possibility of ADB and AIF financing for the HVDC project. A follow-up study was conducted to explore possible ADB and AIF financing and look into details of the possible arrangements, such as ownership structure, buy/sell and/or exchange arrangement, financial arrangement and options to fast forward the HVDC project.

Under the IMT-GT subregion, Malaysia requested ADB to provide assistance in formulating the Green City Action Plan (GCAP) with a prioritized investment program for Melaka. A firm was engaged to provide preliminary and comprehensive scoping work for the preparation of the GCAP Melaka. A consultant was engaged to develop the GCAP and develop a priority program of enabling investment projects. An initial report has been prepared which will be presented at the IMT-GT high level meetings such as the Senior Officials Meeting (21-23 August 2013) and Ministerial Meeting (10-13 September 2013). The final report was presented in March 2014 and further disseminated at a knowledge exchange event for IMT-GT officials in Japan and a workshop on 22-23 April 2014 in Malaysia.

To support power grid development in the BIMP-EAGA subregion, a study was conducted to look at power interconnection between Borneo, potentially connecting Brunei Darussalam, Eastern Malaysia and Kalimantan, and Mindanao, Philippines. The study reviewed the current power systems status and development plans and power demand forecasts in the region. It identified a total of twelve projects as possible interconnection routes to optimize use of the regional energy resources and reduce the required reserve capacity for power utilities in the Island of Borneo. The final results of the study were submitted in December 2014 and further consultations are being pursued by ADB with relevant government agencies.

Active coordination is being maintained with the BIMP-EAGA and IMT-GT subregions to identify suitable regional projects that can be supported by the TA in contribution to the ASEAN connectivity development. Close coordination was also maintained with the Southeast Asia Energy Division, the Indonesia Resident Mission to complete the scoping studies conducted with the support of the TA.

B. Administrative and Technical Support

A national consultant has been engaged to provide continuous administrative and coordination support for the TA, including support for various activities related to the ASEAN Infrastructure Fund Limited (AIF) operations and overall coordination work to implement the technical assistance project.

C. Consensus-Building and Dissemination Activities

ADB Staff participated in various meetings of the ACCC in 2013 and 2014. Consultations continue to further build consensus and effectively disseminate information on the AIF.

Geographical Location Regional
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services Individual consultants will provide advisory, technical, and administrative support services. It is estimated that 26 person-months of international consulting services and 25 person-months of national consulting services are required for the TA.
Procurement Purchase of equipment (computer hardware and software) will be undertaken in coordination with ADB's Office of Information Systems and Technology and Office of Administrative Services, where applicable.
Responsible ADB Officer Cyhn, Jin W.
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Regional Cooperation and Operations Coordination Div, SERD
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Concept Clearance 31 Oct 2011
Fact Finding -
Approval 15 Dec 2011
Last Review Mission -
Last PDS Update 30 Mar 2015

TA 8040-REG

Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Dec 2011 - 15 Dec 2011 31 Dec 2012 31 Dec 2014 31 May 2015
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 975,000.00 0.00 0.00 0.00 0.00 975,000.00 17 Jun 2022 531,084.33

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