BAKU: Putting the infrastructure financing needs of developing Asia at $8 trillion until 2020, the Asian Development Bank (ADB) on Monday announced scaling up its annual operations by 50 per cent to $20 billion for sustainable development of infrastructure to achieve inclusive growth and poverty reduction.
ADB President Takehiko Nakao told the board of directors that about 40pc or 1.4bn population in Asia, based on a new poverty measure of Asia-specific consumption basket, was absolute poor.
“Such high poverty is unacceptable and must be defeated decisively, and soon,” he said.
Under the traditional poverty threshold of $1.25 a day, about 544 million people in Asia were still poor.
He said the ADB will become stronger, better and faster while increasing its operations to eliminate poverty and promote sustainable development in Asia and the Pacific.
Developing Asia comprised all the Asian countries except Japan, Singapore, Korea, China and Hong Kong.
He said the ADB’s stronger lending capacity would emanate from the merger of its grants and commercial operations and it had already started working with client countries to identify new projects for financing.
The ADB project processing would be made faster, without compromising project quality and standards for safeguards and procurement, he said, adding that recent internal reforms had halved the internal processing time for procurement contracts.
Mr Nakao said ADB’s disbursements in 2014 exceeded $10bn, 17pc higher than previous year and hinted at asking increased contributions from members and donors to meet large financing needs in the region.
With the post-2015 development agenda’s Sustainable Development Goals and a global pact against climate change expected to be ratified this year, Mr Nakao said ADB will scale up support for sustainable infrastructure, education and health, and climate change action.
On the sidelines, the ADB staff announced creating an $80m fund to help developing Asia prepare, structure and place public-private partnership (PPP) projects in the market. Led by Japan with $40m and followed by Canada with $20m, Australia and the ADB would pool another $10m each for the fund.
The fund will finance project preparations including due diligence covering technical, financial, legal and regulatory safeguards to attract investors and financial institutions for around 30 infrastructure projects worth $20bn.
The ADB Managing Director General Juan Miranda signed a PPP co-advisory agreement with eight global banks to accelerate flow of private funds into critical infrastructure projects in developing Asia. The agreement is a first formal co-advisory agreement between a multilateral development bank and international commercial banks.
The eight banks included Bank of Tokyo-Mitsubish UFG, BNP Paribas, Credit Agricole CIB, HSBC, Mizho Bank, Macquarie Capital, Societe Generale, and Sumitomo Mitsui Banking Corporation.
The agreement will provide advice to Asian governments that how to best structure PPP projects to make them attractive to private sector and manage the subsequent PPP bidding process and help assess clients the future income flows of projects in energy, roads, railways, water and other infrastructure projects.
Mr Nakao said the ADB will focus on cross-border connectivity to promote trade, create jobs and increase incomes regionally; using PPPs more effectively; ensuring the operational sustainability of infrastructure projects and applying the highest standards for safeguard policies to protect people and the environment.
Assistance to education and health will double in line with ADB’s Midterm Review of Strategy 2020.
To help combat climate change, ADB will strengthen support for energy efficiency and renewable energy, sustainable transport, climate change resilience, and disaster risk management. This includes expanding the use of private equity funds in solar, wind and other renewable energy projects, Mr Nakao said.
Mr Nakao said ADB undertakes rigorous vulnerability assessments for projects, as relatively small upfront investments based on such assessments can save lives and avoid large-scale infrastructure rehabilitation costs later.
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The 2018 Boao Forum for Asia (BFA) annual conference is scheduled for April 8 to 11 in Boao, Hainan Province. The forum will be themed "An Open and Innovative Asia for a World of Greater Prosperity."
— The Daily Mail - People's Daily