Private investments by ADB soars 40% to $2.6b in 2015, covering Asian frontier economies

ADB president Takehiko Nakao (visual from ADB's website)

Manila-based Asian Development Bank (ADB) recorded private sector investments of up to $2.6 billion in 2015 with over 40 per cent of transactions were in “frontier economies” or lower-middle-income and low-income countries.

The figure is also a 37 per cent increase from 2014, and 62 per cent higher than in 2013.

ADB president Takehiko Nakao said they believe private sector is a key engine of growth in developing Asia and a critical partner in alleviating poverty.

“We are substantially expanding our private sector financing and investment operations to meet the rapidly changing needs of this dynamic region,” Nakao said. “By promoting an improved business climate, with enhanced access to more flexible financing solutions and trade facilitation tools, ADB is helping the private sector create high quality jobs and increase living standards across Asia and the Pacific”

ADB earlier disclosed it made investing in frontier economies a priority, citing the institution focuses its capital on countries that have traditionally had more difficulty in securing private sector financing.

ADB reported the expansion has brought its private sector investment portfolio to increase to over $8 billion, and its private sector operations are now targeted to double from current levels by 2020.

The bank recently revealed its approvals of loans and grants, technical assistance, and co-financing increased 19 per cent in 2015 or $27.15 billion compared to $22.89 billion in 2014.

Also Read: PH listed firm EDC signs up $20m debt from ADB for its mega wind energy project

Alongside the growth in overall volume, ADB’s private sector operations also reached record levels in strategic priority sectors in 2015, including climate change, frontier economies, gender equality, and inclusive business.

Among ADB’s notable frontier economy transactions included its first ever deal in Bhutan to support agribusiness, its first power and telecommunications financing in Myanmar, its first liquid natural gas deal in Pakistan and several financial institutions’ transactions in the southern Caucuses and Central Asia.

Also over 30 per cent of private sector transactions in 2015 were focused on climate change and renewable energy, including the first “green bond” in the region for a geothermal operator in the Philippines, an innovative credit-enhanced project bond for the refinancing of a wind power company in India, and the financing of new wind power generation project in Thailand. Of the nine private sector energy investments approved in 2015, seven are considered “green projects”.

Also Read: World Bank to provide $10b, ADB $600m to support Indonesia’s energy, infra project

Likewise ADB continued to ramp up its efforts to create more commercially-viable public-private partnerships (PPP) in the region, highlighted by its service as transaction advisor for the Philippines’ largest ever PPP, the $3.8 billion investment in the North South Railway and commuter rail line.

Also Read: ADB to double annual climate financing to $6b by 2020

Fully two-thirds of private sector transactions in 2015 contained specific gender elements, including projects that directly target women, as well as those that connect households to services that are relatively more beneficial to women, such as access to health, finance, energy and water.

Another of its key highlights in 2015 called “inclusive business” transactions, targeted the economically disadvantaged, accounting for 26 per cent of ADB’s private sector financing during the year, and the majority of the bank’s over $750 million of financing to financial institutions in 2015 was directed to financial inclusion and gender equality in diverse markets such as Georgia, India, Kyrgyz Republic, and Sri Lanka.

ADB seeks to catalyse the flow of third-party commercial financing into its transactions through a variety of cofinancing and risk mitigation products.

ADB noted also in 2015 that its private sector co-financing was over $4.5 billion, representing over 40 per cent of total ADB cofinancing volume during the year, and including nearly $1.5 billion of B loan syndications and risk transfers across such diverse markets as Azerbaijan, the People’s Republic of China, India, and Myanmar.

Also Read: ADB signs $1b loan deal with the Myanmar government for private infrastructure development

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.