In its private sector operations, ADB builds on its existing strengths in the infrastructure sector, financial sectors and capital markets, and agribusiness sector, and seeks to assist private sector projects and companies in these three areas in developing member countries (DMCs).
In infrastructure and project finance, ADB's Private Sector Operations Department (PSOD) is focused on the following core sectors of operation:
- energy (e.g., power, generation transmission and distribution, renewable power);
- transport (e.g., roads, ports, railways, airports);
- water (e.g., water supply and waste treatment); and
- urban infrastructure.
Sector-specific engagements are guided by ADB's strategic agenda at the country level, which in turn reflects client demand. ADB provides assistance in the form of equity, loans and guarantees, as well as B loans (complementary financing scheme) for infrastructure projects. ADB can also assist in arranging parallel financing. We support subsovereign, municipal, corporate and privatization of infrastructure projects. ADB also provides financing for existing infrastructure projects that need to upgrade or expand their facilities to achieve operating efficiencies. Financial restructuring of existing infrastructure projects that were financed with debt denominated in foreign currency and/or used short-term facilities may also be considered for assistance by ADB. PSOD is also encouraging and financing "clean" and renewable technologies appropriate for local settings.
The Infrastructure Finance Division 1 (PSIF1) undertakes projects in Central and West Asia and South Asia while the Infrastructure Finance Division 2 (PSIF2) covers East Asia, the Pacific, and Southeast Asia.
Financial Sectors and Capital Markets 1 / Funds (including but not limited to private equity funds, venture capital funds, etc.)2
ADB supports the development of financial sectors and capital markets to facilitate the mobilization of foreign and domestic capital to productive sectors of the economy.
We fund or facilitate funding of financial institutions so they can, in turn, finance small and medium enterprises, microenterprises, housing mortgages, and other underserved sectors that ADB may not be able to assist directly. Where needed, we help create and build sustainable financial institutions, usually in partnership with like-minded strategic investors.
ADB provides assistance in the form of equity, loans and guarantees the following private sector institutions:
- Capital market institutions, such as stock and fixed income exchanges, central depositories, and rating agencies;
- Leasing or non-bank financial institutions;
- Insurance companies; and
- Funds including private equity funds, venture capital funds, mutual funds, distressed asset funds, infrastructure funds and thematic funds (i.e., environment funds).
We are also keen to catalyze complex capital market solutions and other innovative approaches to financing challenges, including the emerging structured finance and securitization market.
Through its work with financial intermediaries, ADB's private sector operations focus on expanding access to finance, particularly among lower income groups (microfinance and housing finance) and micro-, small, and medium-sized enterprises, as well as on infrastructure development and climate change finance.
Finally, trade finance activities, through the Trade Finance Program (TFP), continue to help reduce the negative impact of the financial crisis on the most vulnerable countries, while at the same time furthering regional integration.
ADB supports agribusiness projects and companies across the entire food and agriculture value chain, including farm input providers, crop and livestock producers, agri-processors, packaged food producers, storage and logistics providers, and food distributors. ADB provides assistance in the form of debt and direct equity investments.
Beyond financial returns, ADB identifies, structures, and finances agribusiness projects supporting food security, food safety, local value addition, rural development, gender inclusion, reduced pollution, climate change mitigation, and climate change adaptation.
ADB works with agribusiness sponsors with strong technical and financial capabilities to ensure a successful implementation of the investment projects.
To enhance the developmental impact of the projects, ADB mobilizes commercial and donor cofinancing. When appropriate, ADB also mobilizes technical assistance grants—for example, to provide direct assistance to smallholder farmers and cooperatives engaged in the agricultural value chain supported by the project.
1 Financial sectors and capital markets (including the TFP) are under the Financial Institutions Division (PSFI) which covers all of ADB's DMCs.
2 Funds are under the Investment Funds and Special Initiatives Division (PSIS) which covers all of ADB's DMCs.