Asian Development Bank eyes more private-sector work, while keeping an eye on trade troubles
|National Post 11 Sep 2019 at 14:46|
The Asian Development Bank says it is looking to do more work with the private sector, such as helping finance a solar power plant in Mongolia that is backed by a Canadian climate fund.
Last year, the Manila-based ADB (in which Canada is a minority shareholder) adopted a new corporate plan, Strategy 2030, that contains priorities such as wiping out poverty, addressing climate change and strengthening governance among its developing members.
To support the plan, the ADB said it would grow its private-sector projects to one-third of its total operations by 2024. These efforts, the bank said, would include helping prepare “bankable” projects that could attract corporate investors, using private-equity funds to extend its reach and boosting support for public–private partnerships.
According to Strategy 2030, the ADB is widening and diversifying its infrastructure efforts by expanding support for the transportation sector and for communication technology aimed at remote areas, among other things.
“ADB will scale up its financing for agribusiness,” the plan adds. “It will also support social sectors, such as health and education, through private ventures focusing on new models and affordable solutions.”
As part of its work, the ADB provides loans, takes equity stakes in private companies and offers technical assistance. The ADB announced in March it was part of a loan to a private-sector solar project in Mongolia that included a grant from the Canadian Climate Fund for the Private Sector in Asia, which the Canadian government set up in 2013.
But the ADB has faced challenges in generating interest in smaller (non-China, non-India) markets, such as Nepal, Armenia and the small-island nation of Vanuatu.
“And under the strategy, we’re trying to get more attention to that, and rally interest to go into these markets,” Édes added.
The ADB’s growing private-sector operations come as the global economy has been rocked by the United States-China trade war, which has stoked uncertainty and bogged down economic growth.
Canada is also a founding member of, and an approximately 5.2-per-cent shareholder in, the ADB, which was established in 1966. As of the end of 2018, Canada had chipped in just over $7.7 billion in subscribed capital to the bank, as well as $2.11 billion to its special funds. Canadian companies and consultants also received approximately $731.7 million in procurement contracts on ADB-backed projects, according to a fact sheet.
“The point is to help countries in developing Asia rise up the ranks to … get on a more sustainable economic growth path, to build resilience,” Édes said. “And in that context, its resilience to deal with economic shock, as well as resilience to deal with natural disasters.”
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