ADB Private Sector Financing Exceeds US$8.3 Billion in 2016

Manila, The Asian Development Bank (ADB) approved US$2.5 billion in new private sector financing in 2016, out of which 60 percent was for energy projects, the bank statement said.

Together with co-financing, ADB mobilized $8.3 billion for private sector projects in the region, a 15 percent increase over last year and a new record for the multilateral.

Major milestones in 2016 included an agreement between ADB and the Japan International Cooperation Agency (JICA) to establish a new fund to support private infrastructure investments across Asia and the Pacific.

The Leading Asia's Private Infrastructure Fund, or LEAP, is capitalized by $1.5 billion in equity from JICA and will help mobilize some $6 billion in investments. The fund became operational in August and over $200 million of LEAP funds were allocated through end-2016 in renewable energy projects in India and Indonesia.

ADB accelerated overall support for energy projects in 2016, which comprised 60 percent of private sector financing for the year. Notable energy transactions included the $400 million financing for Tangguh LNG in Indonesia and a $1 billion joint ADB sovereign and non-sovereign financing of the Shah Deniz gas project in Azerbaijan.

As part of its commitment to increasingly go "green," eight out of ten private sector energy projects in 2016 were in clean energy, including the first utility scale solar power project in Cambodia by Sunseap and the Muara Laboh geothermal power project in Indonesia. Climate change financing in the private sector exceeded $1 billion in 2016.

ADB continued to expand in the agribusiness sector, financing three transactions, including innovative support for dairy farmers to improve animal waste management in China and for the introduction of climate-controlled greenhouses for flowers and vegetable production in Viet Nam, Indonesia, and the PRC.

Lending to financial institutions, which primarily support micro, small, and medium-sized enterprises, continued to be a major part of ADB's private sector portfolio. In 2016, ADB approved 10 transactions in the finance sector valued at over $590 million. In addition, despite a tough year for trade, ADB's Trade Finance Program supported over $3 billion in trade in 2016, a 20 percent increase over the previous year.

ADB's private sector operations are targeted to grow to $4 billion by 2020, with major expansions in funding for infrastructure, agribusiness, climate change and renewable energy, and inclusive business.

Source: Qatar News Agency