ADB Ventures Financing Partnership Facility
What is the ADB Ventures Financing Partnership Facility?
Established in January 2020, the ADB Ventures Financing Partnership Facility (ADB Ventures) supports and invests in early-stage companies with technology enabled solutions that contribute to achieving the Sustainable Development Goals (SDGs) in Asia and the Pacific. ADB Ventures is a non-sovereign platform that is expected to operate for about 30 years. ADB can accept and administer financial contributions to trust funds and technical assistance from multiple funding sources including bilateral, multilateral organizations, and the private sector. These contributions may be in the form of returnable capital and/or grants. ADB’s vision is for ADB Ventures to become a leading impact technology investment platform in the Asia-Pacific that crowds in over $1 billion of risk capital for early-stage companies; and thereby unlocking the potential for private sector capital and technological know-how to contribute towards attainment of the SDGs.
What are the priorities?
ADB Ventures Investment Fund 1 (Fund 1), the anchor fund of ADB Ventures, will contribute to multiple SDGs including a focus on technology-enabled solutions that address climate change and gender inequality. Fund 1 has a 17-year life, allowing patient investment capital in the form of equity and quasi-equity financing to support clean technology, sustainable agricultural technology, inclusive financial technology, and health technology solutions. Fund 1 will primarily target impact in ADB developing member countries (DMCs) in Southeast Asia and South Asia.
ADB Ventures also includes technical assistance that aims to support nascent markets for impact technologies in ADB’s DMCs and generate an investment pipeline by reducing market and financing risks (“de-risk”) for early-stage companies through two main activities.
- ADB Ventures SEED is a reimbursable grant program to validate and de-risk pilots and promote expansion into frontier DMC markets that early-stage companies might otherwise not prioritize,
- ADB Venture Lab involves working collaboratively with public and private sector partners to match their demand for relevant technology-enabled solutions with commercially viable early-stage companies.
What kind of activities are eligible?
Under this facility, ADB has established multi-donor funds and technical assistance that offer the following modalities:
- Equity and quasi-equity investments to finance and scale early-stage companies with technology enabled solutions contributing to the SDGs
- Reimbursable grants to de-risk and deploy impact technology solutions in DMCs
- Technical assistance funded activities to connect potential technology adopters with technology solution providers to generate proof-of-concept opportunities
What will funders gain from contributing to the facility?
By supporting ADB Ventures, funders will leverage ADB’s unique convening power, expertise, and resources to crowd technology and investment into emerging markets. ADB Ventures provides strong additionality to existing venture capital investors including:
- Risk mitigation, by leveraging ADB’s extensive public and private sector operations networks that are potential customers of impact technology solutions, with the aim of providing targeted reimbursable grants to de-risk initial deployment in DMCs
- Standard setting, by encouraging improved standards of environmental and social safeguards, and climate/gender impact monitoring as early-stage companies grow and scale
- Intra-regional and global technology transfer, by encouraging technology transfer to ADB’s DMCs through network partnerships in both developed and developing economies
- Patient capital that is not readily available for impact technologies in the venture capital markets within many DMCs
- Resource mobilization as a result of ADB’s involvement that crowds in impact investors
Who is eligible to receive financing?
All DMCs are eligible for ADB Ventures support. Since ADB Ventures is a non-sovereign platform managed by ADB’s Private Sector Operations Department, only private sector companies or entities are eligible for assistance. Companies can be domiciled globally, however, the impact focus must be in a DMC.
Who has supported the facility?
So far, the Ministry of Foreign Affairs Finland, Clean Technology Fund, Nordic Development Fund, and the Ministry of Economy and Finance Republic of Korea have supported the Facility through their contributions to Fund 1. The Department of Foreign Affairs and Trade Australia, Clean Technology Fund and Nordic Development Fund contributed to project preparation.