Regional: Pacific Private Sector Development Initiative, Phase IV

Finance / Banking systems and nonbank financial institutions - Finance sector development - Inclusive finance - Small and medium enterprise finance and leasing

Public sector management / Law and judiciary - Reforms of state owned enterprises

The Pacific Private Sector Development Initiative (PSDI) provides advisory and capacity-building assistance to help Pacific developing member countries (DMCs) of the Asian Development Bank (ADB) improve their business enabling environments. This in turn supports inclusive, private sector-led economic growth. The three consecutive phases of PSDI implemented since 2007 have helped Pacific DMCs carry out reforms and introduce new policies to improve conditions for private sector development and investment, responding to related needs and opportunities as they evolved. PSDI has expended $60.83 million during the first three phases which funded more than 600 subprojects. This included grant cofinancing of $54.73 million from Australia and New Zealand which reflects the importance and value their governments place on introducing reforms and building capacity for private sector development in the Pacific.

The technical assistance (TA) for Phase IV (PSDI IV) will build on Phase III achievements across six core areas of focus: access to finance, business law reform, state-owned enterprise reform, public-private partnerships, competition and consumer protection, and the economic empowerment of women. PSDI IV will retain these areas of focus and also respond to climate change and labor mobility by incorporating these issues into relevant subprojects.

A 2018 review of PSDI by ADB's Independent Evaluation Department (IED) found that the first three phases helped provide several important inputs necessary for establishing modern, functioning private sectors in Pacific DMCs. While concluding that PSDI remained relevant and well-aligned with these DMCs' needs, IED made recommendations aimed at improving outcomes. These recommendations have been incorporated into PSDI IV. PSDI IV is consistent with ADB's Strategy 2030 and aligned with the strategic priorities of ADB's Pacific Approach, 2016-2020. The TA is included in the Pacific Regional Operations Business Plan, 2019-2021.

Inclusive, private sector-led economic growth achieved in Pacific DMCs

Gender-inclusive enabling environment for private sector development improved

Access to inclusive business finance improved

Business and regulatory environment improved, and technology platforms introduced

State-owned enterprise performance improved through reforms, including privatization and public-private partnerships

Effective competition and consumer protection policies developed and implemented

PSDI is working to develop new financial products using secured transactions frameworks in the Federated States of Micronesia, Fiji, PNG, and Samoa. Target of at least five new financial products introduced to support the implementation of PPSAs in selected Pacific DMCs on track to be achieved.

PSDI is on track to procure and implement a new regional registry for small Pacific island countries and a national online business registry for PNG.

PSDI is on track in supporting the establishment of policies and legislation that promote competition and consumer protection in at least three additional Pacific DMCs.

PSDI is supporting PPP transactions in PNG and Tonga, and assessing PPP options in Palau and Tuvalu. Currently, PSDI is on track to complete least two additional PPP transactions that also address climate change.