Statement of the Asian Development Bank s Operations in 2017

Transcription

1 February 208 Statement of the Asian Development Bank s Operations in 207 This document is being disclosed to the public in accordance with ADB s Public Communications Policy 20.

2 I. OVERVIEW OF OPERATIONS. In 207, Asian Development Bank (ADB) operations amounted to $28.90 billion, of which $9.09 billion was for sovereign and nonsovereign project approvals financed by regular ordinary capital resources (OCR), concessional ordinary capital resources (COL), Asian Development Fund (ADF) and other special funds; $206 million was for technical assistance (TA) financed by special funds; and $9.60 billion financed by cofinancing partners. By type, total approvals funded by OCR, COL, ADF and special funds consisted of (i) $7.62 billion in loans, (ii) $553 million in grants, (iii) $526 million in guarantees, (iv) $390 million in equity investments, and (v) $206 million in TA. 2. The top five recipients of ADB s funding including cofinancing are People s Republic of China ($3.83 billion), Pakistan ($3.29 billion), India ($3.5 billion), Bangladesh ($3.09 billion), and Indonesia ($3.0 billion). Excluding cofinancing, the top five recipients are People s Republic of China ($2.74 billion), India ($2.64 billion), Pakistan ($2.2 billion), Bangladesh ($.96 billion), and Indonesia ($.96 billion). Appendix provides a breakdown of approvals by financing source, region and country. Appendix 5 provides a glossary of technical terms relating to ADB operations. 3. Commitments for 207 amounted to $32.22 billion, of which $20.30 billion was ADB-funded and $.92 billion was cofinanced. Overall, total commitments for the year increased by $6.75 billion (26%) over 206. ADB-funded commitments increased by $6.85 billion (5%) from $3.45 billion in 206. Sovereign cofinancing commitments declined by $393 million (6%) while nonsovereign cofinancing commitments increased by $293 million (5%). Overall, cofinancing commitments decreased by $00 million (%) over The top five countries in terms of commitments including cofinancing are India ($5.57 billion), People s Republic of China ($3.49 billion), Pakistan ($3.34 billion), Bangladesh ($3.20 billion), and Indonesia ($3.2 billion). Excluding cofinancing, the top five recipients are India ($3.63 billion), People s Republic of China ($2.37 billion), Pakistan ($2.2 billion), Indonesia ($2.03 billion), and Bangladesh ($2.0 billion). Appendix 2 provides a breakdown of commitments by financing source, region and country. II. SOVEREIGN AND NONSOVEREIGN OPERATIONS 5. In 207, sovereign approvals excluding TA and cofinancing amounted to $5.94 billion, an increase of $.06 billion (7%) compared to 206. The increase is mainly due to an increase in loan approvals. Nonsovereign approvals excluding TA and cofinancing increased by $648 million (26%) from $2.50 billion to $3.5 billion, mainly due to increase in equity investment and guarantee approvals. 6. Sovereign and nonsovereign commitments excluding TA and cofinancing amounted to $7.8 billion and $2.29 billion, respectively. Sovereign commitments increased by $6.29 billion (55%) largely due to an increase in loan and guarantee commitments. Nonsovereign commitments increased by $536 million (3%) due to an increase in loan and equity investment commitments.

3 2 Table : Sovereign and Nonsovereign Operations, ($ million) = nil. Note: Figures may not add up due of rounding. ADB-financed nonsovereign operations include nonsovereign public and private sector loans, equity investments, guarantees, and TA. 2 Based on adjustments to the 206 Statement of ADB Operations circulated in March 207. The 206 adjusted figures for approvals exclude an Azerbaijan loan for $75 million that was terminated before signing, and the transfer of two Pakistan project design advance amounting to $5 million to its ensuing loans. The 206 adjusted figures for commitments includes four loans wherein borrowers opted to convert to single currency loan in USD. 3 The 207 approvals include $300 million and 207 commitments include $74.92 million classified as debt securities in financial statements in accordance with accounting standards guarantee commitment was changed due to application of the final definition of guarantee commitment. 5 Also see Table 3 for specific details of cofinancing. 6 Based on adjustments to the 206 Statement of ADB Operations circulated in March 207. The 206 adjusted figures for commitments are due to application of the revised definition of official cofinancing commitments (R-Paper on Operational Adjustments and Change in Application of Existing ADB Policies Following the Introduction of Commitments as Performance Measurement (DOC.R65-7) issued on 8 August 207). These exclude cofinanced projects in Viet Nam ($ million), Bangladesh ($328 million), Philippines ($50 million), Pakistan ($82.50 million), Kyrgyz Republic ($40 million), Solomon Islands ($23.35 million), Nepal ($36 million), and Tonga ($0.23 million); and include additional cofinanced projects in Viet Nam ($ million), Nepal ($20 million), and Lao PDR ($5 million). 7 Also see Appendix 5 for list of trust funds. 8 Others include private sector cofinancing through corporate social responsibility programs ($ million in 206), foundations ($2.5 million in 206), and any public source, such as national development banks ($30 million for approvals and $8.73 million for commitments in 206; and $400 million for approvals and $30 million for commitments in 207), that do not fall under official cofinancing. 9 Revolving programs cofinancing in 207 include $2.8 billion from the Trade Finance Program (TFP), $8.7 million from the Supply Chain Finance Program (SCFP), and $09.34 million from the Microfinance Risk Participation and Guarantee Program (MFP) for both approvals and commitments. While revolving programs cofinancing in 206 include $.77 billion from the Trade Finance Program (TFP), $0.33 million from the Supply Chain Finance Program (SCFP), and $85.9 million from the Microfinance Risk Participation and Guarantee Program (MFP) for both approvals and commitments. Most of these revolving programs have short term tenor. 0 The total includes risk transfers amounting to $29.43 million in 206 and $ million in 207 for both approvals and commitments. The risk transfers do not increase the total amount of financing being made available to borrowers rather, they diversify the composition thereof.

4 3 III. OPERATIONS BY FINANCING SOURCE 7. Table 2 provides details on approvals and commitments by financing source. Projects funded from regular OCR amounted to $6.82 billion or 87% of the total ADB approvals of $9.30 billion ($7.55 billion in 206). The remaining 3% is funded by COL, ADF and other ADB Special Funds. 8. Regular OCR funded commitments amounted to $7.23 billion or 85% of the total ADB commitments of $20.30 billion. The remaining 5% is accounted for by COL, ADF and other ADB Special Funds. Table 2: Operations by Financing Source, ($ million) The 207 approvals include $300 million and the 207 commitments include $74.92 million classified as debt securities in financial statements in accordance with accounting standards. 2 Approvals: The 207 figures include two project design advances (PDA). Commitments: The 207 figures include three PDAs. 3 Special funds other than ADF such as Asia Pacific Disaster Response Fund. 9. A total of $9.60 billion cofinancing was approved in 207 ($4.06 billion in 206), of which 99% ($9.49 billion) was for project cofinancing and % ($9 million) was for TA cofinancing. 0. Commitments from cofinancing in 207 amounted to $.92 billion ($2.02 billion in 206), $.8 billion (99%) for project cofinancing and $09 million (%) for TA cofinancing.

5 4 Table 3: Cofinancing by Source, ($ million) = nil, TFP = trade finance program, SCF = supply chain finance. Refers to direct value-added (DVA) cofinancing which involves active coordination and formal agreements among financing partners that bring about defined client benefits. 2 Approvals: Of these amounts, $20.8 million in 206 and $7 million in 207 were financed by the Japan Fund for Poverty Reduction. Commitments: Of these amounts, $3.8 million in 206 and $5 million in 207 were financed by the Japan Fund for Poverty Reduction. 3 This refers to the amount of OCR allocation relief as a result of risk transfer arrangements, whereby a third party assumes risk under a guarantee or loan provided by ADB. The amount of allocation relief depends on the risk rating and nature of the counterparty. 4 Refers to private sector cofinancing through corporate social responsibility programs ($ million in 206 for approvals and commitments), foundations ($.5 million in 206 for approvals and commitments), and any public source such as national development banks ($30 million for approvals and $8.73 for commitments in 206; and $400 million for approvals and $30 million for commitments in 207), that do not fall under official cofinancing. 206: Bank of Beijing (approvals - $30 million), China Construction Bank Corporation (commitments - $8.73 million), Bill and Melinda Gates Foundation through the Sanitation Financing Partnership Trust Fund (approvals and commitments - $.5 million) and Chevron (approvals and commitments - $ million). 207: Uzbekistan Fund for Reconstruction and Development (approvals - $400 million) and Bank of Beijing (commitments - $30 million). 5 Includes US$ and local currency complementary loans. 6 For approvals in 207, TFP had an annual turnover (or gross DVA) of $4.48 billion, of which $2.8 billion was cofinanced and $.67 billion was for ADB s capital redeployment. 7 For loans provided by third parties and not fully guaranteed by ADB, such as partial credit guarantees or partial risk guarantees, the portion of loans that is not guaranteed by ADB is considered as net DVA cofinancing and reported in the year of signing the guarantee agreements. Includes $09.34 million in 207 and $85.9 million in 206 from the Microfinance Risk Participation and Guarantee Program (MFP) for both approvals and commitments. 8 Approvals: Of these amounts, $39. million in 206 and $24.6 million in 207 were financed by the Japan Fund for Poverty Reduction. Commitments: Of these amounts, $37. million in 206 and $28. million in 207 were financed by the Japan Fund for Poverty Reduction. 9 Includes other concessional cofinancing sources. Bill and Melinda Gates Foundation through the Sanitation Financing Partnership Trust Fund ($ million in 206 for approvals and commitments; $0.27 in 207 for approvals and commitments), and Korea Energy Agency ($0.4 million in 207 for approvals and commitments).

6 5 IV. NONSOVEREIGN PUBLIC AND PRIVATE OPERATIONS. Nonsovereign approvals in 207 totaled $9. billion, of which $8.99 billion (99%) came from private sector operations in the form of loans, equity investments, guarantees, TA, official cofinancing and commercial cofinancing. Nonsovereign public approvals amounted to $20 million (%). 2. Nonsovereign commitments amounted to $8.24 billion, of which $7.24 billion (88%) was from private sector operations. Nonsovereign public commitments amounted to $ billion (2%). Table 4: Nonsovereign Operations, ($ million) = nil. Refers to assistance given to entities with more than 50% of its voting capital held by entities that are owned or controlled by the state or state-owned entities, or by the local government or other subsovereign entity, or a stateowned entity that can contract and obtain financing independently from the related sovereign, and that can sue and be sued. 2 The 207 approvals include $300 million and 207 commitments include $74.92 million classified as debt securities in financial statements in accordance with accounting standards. 3 Approvals: Include $25 million in 206 and $2.35 million in 207 financed by the Leading Asia s Private Sector Infrastructure Fund (LEAP). Commitments: Include $2.7 million in 206 and $32.98 million in 207 financed by the Leading Asia s Private Sector Infrastructure Fund (LEAP). 4 Includes US$ and local currency complementary loans. 5 Includes $09.34 million in 207 and $85.9 million in 206 from the Microfinance Risk Participation and Guarantee Program (MFP) for both approvals and commitments. Commitments: In 206, cofinancing was from trust fund sources; in 207, cofinancing was from a bilateral source. 6 Approvals: In 206, cofinancing was from trust fund sources; in 207, cofinancing was from a bilateral and trust fund sources. Commitments: In 206, cofinancing was from trust fund sources; in 207, cofinancing was from a bilateral source.

7 6 V. OPERATIONS BY MODALITY INCLUDING COFINANCING 3. Of the $28.90 billion approved in 207, 77% ($22.20 billion) was for investment support, 9% ($2.58 billion) for results-based lending, 3% ($3.79 billion) for policy-based support and % ($325 million) for TA (Figure 3). 4. Of the $32.22 billion commitments in 207, 76% ($24.53 billion) was for investment support, 0% ($3.32 billion) for results-based lending, 3% ($4.07 billion) for policy-based support and % ($309 million) for TA (Figure 4). Table 5: Operations by Financing Source and Modality Including Cofinancing, ($ million) = nil. Includes countercyclical support facility amounting to $500 million in 206 for both approvals and commitments. 2 Includes Technical Assistance Special Fund and other special funds. 3 Includes countercyclical support facility amounting to $ billion in 206 for both approvals and commitments.

8 7 VI. INVESTMENT FACILITY OPERATIONS 7. In 207, one Investment Facility (IF) was approved amounting to $700 million which resulted in three small-value projects amounting to $26 million. Commitments from IF operations amounted to $4 million for two small-value projects. Table 6: Investment Facility Operations ($ million) = not applicable. Refers to project cofinancing. 207: To be determined source ($500 million). 2 The approved IF subprojects include Cook Islands: Renewable Energy ($2 million), Marshall Islands: Majuro Power Network Strengthening Phase ($2 million), and Vanuatu: Energy Access ($2 million). The Marshall Islands and Vanuatu projects were also committed in Refers to project cofinancing. 207: Green Climate Fund ($2 million for approvals) and Strategic Climate Fund ($7 million for both approvals and commitments).

9 8 VII. MULTITRANCHE FINANCING FACILITY OPERATIONS 5. Eight MFFs amounting to $5.63 billion and 2 MFF tranches amounting to $3.4 billion were approved in 207, compared to seven MFFs ($4.60 billion) and 24 MFF tranches ($4.70 billion) in 206. This is an increase of $.04 billion (23%) for MFFs and a decrease of $.29 billion (27%) for MFF tranches. 6. Commitments from 23 tranche approvals totaled $4.89 billion, an increase of $.84 billion (6%) from $3.05 billion for 22 tranches in 206. Table 7: Multitranche Financing Facility and Tranche Operations ($ million) = not applicable. Refers to project cofinancing. 206: European Investment Bank ($70.8 million) and Green Climate Fund ($3.04 million). 207: Export Import Bank of Korea ($99.04 million), Government of Australia ($.5 million), Japan International Cooperation Agency ($ million), and a to be determined source ($75 million). 2 The total of all MFF tranches approved during the year. 3 Refers to project cofinancing for the MFF tranche loan. 206: Approvals - Agence Francaise de Developpement ($2.5 million), Clean Technology Fund ($20 million), European Investment Bank ($26.6 million), Japan International Cooperation Agency ($ million), Export Import Bank of Korea ($22 million), Swedish International Development and Cooperation Agency ($2.4 million), and World Bank ($704 million). Commitments - European Investment Bank ($50 million), Japan International Cooperation Agency ($6.72 million), Export Import Bank of Korea ($22 million), KfW Bankengruppe ($7 million), Swedish International Development and Cooperation Agency ($2.4 million), and World Bank ($79 million). 207: Approvals European Investment Bank ($9.64 million), Export Import Bank of Korea ($75.06 million), and Japan International Cooperation Agency ($ million). Commitments - Agence Francaise de Developpement ($82.5 million), Clean Technology Fund ($00 million), European Investment Bank ($46.24 million), Japan International Cooperation Agency ($ million), Export Import Bank of Korea ($75.06 million), and World Bank ($625 million). 4 These exclude cofinanced projects in Viet Nam ($ million) and Pakistan ($82.5 million), and includes an additional cofinanced project in Viet Nam ($7 million) due to finalization of the definition of official cofinancing commitments. 5 Refers to project cofinancing for the MFF tranche grant. 206: Approvals Afghanistan Infrastructure Trust Fund ($ million), Clean Energy Fund ($.5 million), Chevron ($ million), European Union ($9.99 million), Green Climate Fund ($3.04 million), People's Republic of China Regional Cooperation and Poverty Reduction Fund ($ million), Government of Switzerland ($4.5 million), Urban Climate Change Resilience Trust Fund ($5 million), and World Bank ($22.93 million). Commitments - Afghanistan Infrastructure Trust Fund ($ million), Clean Energy Fund ($.5 million), Chevron ($ million), European Union ($9.99 million), New Zealand ($4.77 million), and People's Republic of China Regional Cooperation and Poverty Reduction Fund ($ million). 207: Approvals - Afghanistan Infrastructure Trust Fund ($60 million), Australia ($.5 million), and Islamic Development Bank ($5 million). Commitments - Afghanistan Infrastructure Trust Fund ($60 million), Australia ($.5 million), Green Climate Fund ($3.04 million), Islamic Development Bank ($5 million), Urban Climate Change Resilience Trust Fund ($5 million), and World Bank ($22.93 million).

10 Appendix 9 APPROVALS BY COUNTRY, 207 ($ million) ADF = Asian Development Fund, COL = concessional ordinary capital resources, OCR = regular ordinary capital resources, TASF = technical assistance special funds. Note: Figures may not add up due of rounding. Includes $300 million classified as debt securities in financial statements in accordance with accounting standards. 2 Figures include OCR, COL, ADF, and Other Special Funds.

11 0 Appendix 2 COMMITMENTS BY COUNTRY, 207 ($ million) ADF = Asian Development Fund, COL = concessional ordinary capital resources, OCR = regular ordinary capital resources, TASF = technical assistance special funds. Note: Figures may not add up due of rounding. Includes $74.92 million classified as debt securities in financial statements in accordance with accounting standards. 2 Figures include OCR, COL, ADF, and Other Special Funds.

12 Appendix 3 LOANS, GRANTS, EQUITY INVESTMENTS AND GUARANTEES APPROVALS BY COUNTRY ($ million) Note: Includes OCR, COL, ADF and Other Special Funds; and excludes technical assistance and cofinancing. For 2008 to 206, figures exclude dropped or cancelled loans, grants, equities and guarantees prior to signing.

13 2 Appendix 4 LOANS, GRANTS, EQUITY INVESTMENTS AND GUARANTEES COMMITMENTS BY COUNTRY ($ million) Note: Includes OCR, COL, ADF and Other Special Funds; and excludes technical assistance and cofinancing.

14 Appendix 5 3 GLOSSARY ADB s Operations B Loan / Syndication Bilateral Financing Capital Redeployment Cofinancing ADB s operations consist of ordinary, special operations, and cofinancing: Ordinary operations are financed from ADB s ordinary capital resources (OCR) which comprise paid-in capital from its members, accumulated reserves, and borrowings from the open market. Special operations are financed from special funds resources. Cofinancing is provided by official or commercial sources. A cofinancing arrangement involving the coordinated process of pooling funds from various sources for a single borrower or grant recipient, and/or distributing related risks among such other financiers. Funds provided by governmental agencies within individual countries dedicated to advancing foreign policy goals while contributing to the economic and social development of recipient developing countries. Guaranteed and/or disbursed amounts of exposure retained by ADB (not cofinanced) in relation to a project or program of a revolving nature, which, in the aggregate during the course of a reporting period, exceeds amounts previously approved. Refers to any transaction-specific arrangement under which funds or risk-sharing capacity provided by a third party (other than from entities operating under the budgetary resources of the borrowing or host developing member country, or the project sponsors) are associated with ADB funds, guarantees, or other financial instruments (Operations Manual (OM) E). Commercial Cofinancing Commercial cofinancing complements ADB s ordinary capital resources (OCR) lending mainly through the application of ADB s credit enhancement instruments. Such cofinancing is effected by both private and public sector institutions. It is usually sourced from financial markets and priced at commercial terms. Credit enhancements and risk-sharing arrangements are instrumental in mobilizing financial flows, particularly for projects and programs that, without ADB involvement, are perceived as risky by commercial partners. It includes b-loan, parallel loans, Trade Finance Program cofinancing, guarantee cofinancing, and risk transfer.

15 4 Appendix 5 Commitment Debt Security Direct Value Added (DVA) Cofinancing Equity Investment Grant Commitment is the financing approved by ADB's Board of Directors or Management for which the investment agreement has been signed by the Borrower, recipient, or the investee company and ADB. It is the amount indicated in the investment agreement that may or may not be equal to the approved amount depending on the exchange rate at the time of signing. In the case of official and commercial cofinancing not administered by ADB for which the signed amount is not readily available, the approved amount is used. A traded instrument that can be bought or sold between two parties. A debt security represents borrowed funds that must be repaid by the borrower to the holder of the debt security. It includes government bonds, corporate bonds, municipal bonds, preferred stock, and collateralized securities. For performance reporting purposes, ADB has introduced the concept of direct value-added (DVA) cofinancing, which involves active coordination and formal agreements among financing partners that bring about defined client benefits (OM E). Two distinct types of equity investments that the Private Sector Operations Department (PSOD) undertakes in its normal course of business. These are: Direct equity investments a direct investment in an investee company for its shareholdings and payment is made directly to the company. Investments may be in different types of shares, such as common (ordinary), preferred shares, as well as units of mutual fund. Equity investments can be denominated in the currency of the host country. Private equity funds ADB may invest with a group of other investors, in a private equity fund taking a shareholding through different legal structures, the most common of which is a limited partnership agreement or a limited liability company. The private equity fund, in turn, invests in investee companies that it identifies through its deal pipeline. Private equity fund investments are mostly denominated in US dollars. A non-technical assistance instrument provided for investment support and/or policy-based support.

16 Appendix 5 5 Guarantee Guarantee Cofinancing Investment Facility (IF) Modality Multilateral Financing Multitranche Financing Facility (MFF) Guarantees allow ADB to assume commercial and/or political risks arising under debt instruments provided by other financing partners (OM D9). These include: Partial credit guarantee ADB provides comprehensive nonpayment cover to cofinanciers against all commercial and political risks for a specified portion of a borrower s debt service obligation. Political risk guarantee ADB provides financing partners with coverage against specifically defined political (or sovereign) risks. Cover is available against any combination of transfer restriction, expropriation, political violence, contract disputes, and non-honoring of sovereign obligations or guarantees. The cover may be for principal and/or interest payment obligations. This refers to the portion of loans provided by third parties that is not guaranteed by ADB. This portion is considered part of net DVA cofinancing and reported in the year of signing of the guarantee. A new and innovative financing model developed to streamline ADB s internal procedures and enhance its ability to process smallvalue projects. It improves project delivery efficiencies in a particular set of countries which has specific challenges. The facility delegates approval of individual project financing to ADB Management of up to $200 million in cumulative ADB financing, in accordance with established eligibility criteria. Involves the specific application of instruments (loan, equity investment, grant, project cofinancing, and guarantee) classified as investment support, policy-based support, results-based lending, other budget support (countercyclical support facility), or technical and advisory support. Funds provided by financial institutions established or chartered by more than one country to provide financial support and professional advice for economic and social development activities in developing countries. A financing modality made available by ADB to a client to support its medium- to long-term investment program or investment plan. It enables ADB to provide assistance programmatically by aligning the provision of financing with project readiness and the long-term needs of a client. The MFF facilitates long-term partnerships between ADB and its clients, and provides opportunities for constructive dialogue on physical investments as well as nonphysical (thematic and sector) interventions. The term facility refers to MFF (OM D4).

17 6 Appendix 5 Nonsovereign Operations Refers to any loan, guarantee, equity investment, or other financing arrangement that is (i) not guaranteed by a government; or (ii) guaranteed by a government under terms that do not allow ADB, upon default by the guarantor, to accelerate, suspend, or cancel any other loan or guarantee between ADB and the related sovereign (OM D0). Official Cofinancing Operations Manual Other Concessional Cofinancing Parallel Cofinancing Flowing mainly from financing partnerships with multilateral and bilateral development assistance agencies, official cofinancing mobilizes (i) grants, risk transfers and loans for investment projects supported by ADB and (ii) grants for ADB s technical assistance (TA) operations. Such cofinancing is usually sourced from official development aid. Consistent with ADB s strategic directions and resource allocations, official cofinancing focuses on strong partner and client coordination for (a) easy access and efficiencies in processing, (b) low transaction costs, and (c) harmonized and transparent mechanisms in reporting to financing partners on the development impact of their contributions. Operations Manual (OM) collects ADB's operational policies known as Bank Policies which are short, focused statements that follow from the Agreement Establishing the Asian Development Bank (the Charter), the Regulations of the Asian Development Fund (ADB), the Regulations of Ordinary and Special Operations (OCR), and operational policies adopted by the Board of Directors. Mobilizes and syndicates grants and concessional loans for investment projects and programs and TA projects, with ADB participation. In addition to public sources of cofinancing, this includes private sector cofinancing through foundations, corporate social responsibility programs, civil society organizations, and any other sources that do not fall under official and commercial cofinancing categories (OM E). Parallel Cofinancing is cofinancing provided by third party cofinanciers to a project alongside ADB. Parallel Cofinancing can either be a: (i) Parallel loan, which is a third party loan in transactions that have ADB s direct loan or direct equity participation, and; (ii) Parallel equity, which is a third party equity investment in (a) private equity fund where ADB is a general or a limited partner or (b) transactions where ADB makes a direct equity investment. Private Sector Nonsovereign Transactions Project Cofinancing Refers to financing for enterprises that are majority-owned by private parties (defined as entities with more than 50% of their capital held privately) (OM D0). Covers official loans, commercial loans, syndications, and investment grants financed from external sources.

18 Appendix 3 7 Project Design Advance (PDA) Public Sector Nonsovereign Transactions Risk Transfer Sovereign Under the project design facility (PDF), a project design advance provides quick-disbursing resources for project formulation and development, primarily for detailed engineering design. It can also finance broader project and program preparatory work (e.g., feasibility studies, due diligence, preliminary designs, safeguard and pre-implementation work), including those for policy-based lending and nonsovereign operations; and transaction advisory services for public private partnerships (PPPs). Project Design Facility is a financing modality used for project preparation, particularly detailed engineering design (R-Paper on Establishing the Project Design Facility, 20). Refers to loans, guarantees, and syndications to or for enterprises that are majority owned by public entities (that is, more than 50% of its voting capital is held by entities that are owned or controlled by the state or state-owned entities), it must be a local government or other subsovereign entity, or a state-owned entity that can contract and obtain financing independently from the related sovereign and that can sue and be sued (OM D0). This refers to the arrangement whereby a third party assumes risk under a guarantee or loan provided by ADB. The amount of allocation relief depends on the risk rating and nature of the counterparty. Loans extended to the government or guaranteed by the government (OM D). Special Funds Resources Consist of Asian Development Fund, Technical Assistance Special Fund, Japan Special Fund, Pakistan Earthquake Fund, Regional Cooperation and Integration Fund, Climate Change Fund, Asia Pacific Disaster Response Fund, and Financial Sector Development Partnership Special Fund. Statement of ADB s Operations Supply Chain Finance Program (SCF) TA Cofinancing TA Grant An annual report providing information on ADB's operations to the Board of Directors. It provides a snapshot of the amount of assistance approved by ADB for the calendar year. It provides guarantees and debt financing (both without a government guarantee) through partner financial institutions (PFIs) in support of payments throughout the supply chain. Refers to TA financed from external sources. External sources comprise trust funds, grants provided under TA-specific cofinancing agreements, and grants under fund channeling framework agreements (OM D2). TA operations contribute to the achievement of country and regional development objectives. They facilitate the flow and efficient utilization of development finance to developing member countries (DMCs) and recipients within DMCs to enhance their development capacity. TA is classified as capacity development, policy advisory, project preparatory, or research and development.

19 8 Appendix 5 Trade Finance Program (TFP) Trust Fund TFP fills market gaps by providing guarantees and loans through partner banks to support trade. TFP enhances banks abilities to support importers and exporters, including SMEs, and works in partnership with the private sector to provide capacity, liquidity, and stability to the trade finance system. Trust funds channel cofinancing to ADB s project and TA operations through comprehensive arrangements. Under a trust fund, a financing partner provides untied funds to cofinance a number of ADB interventions for an agreed sector, driver of change, or group of DMCs. In 206: Afghanistan Infrastructure Trust Fund, Asia Pacific Project Preparation Facility, Asian Clean Energy Fund, Canadian Climate Fund for the Private Sector in Asia, Canadian Cooperation Fund on Climate Change, Carbon Capture and Storage Fund, Clean Energy Fund, Cooperation Fund for Project Preparation in the Greater Mekong Subregion and in Other Specific Asian Countries, Danish Cooperation Fund for Renewable Energy and Energy Efficiency in Rural Areas, Financial Sector Development Partnership Fund, Gender and Development Cooperation Fund, Integrated Disaster Risk Management Fund, Investment Climate Facilitation Fund, Japan Fund for Poverty Reduction, Japan Fund for the Joint Crediting Mechanism, Leading Asia s Private Sector Infrastructure Fund, Multi-Donor Trust Fund under the Water Financing Partnership Facility, Netherlands Trust Fund under the Water Financing Partnership Facility, People's Republic of China Poverty Reduction and Regional Cooperation Fund, Project Readiness Improvement Trust Fund, Regional Malaria and Other Communicable Disease Threats Trust Fund, Republic of Korea e- Asia and Knowledge Partnership Fund, Sanitation Financing Partnership Trust Fund, Second Danish Cooperation Fund for Renewable Energy and Energy Efficiency in Rural Areas, Spanish Cooperation Fund for Technical Assistance, Typhoon Yolanda Multi-Donor Trust Fund, Urban Climate Change Resilience Trust Fund, Urban Environmental Infrastructure Fund. In 207: Afghanistan Infrastructure Trust Fund, Asian Clean Energy Fund, Canadian Climate Fund for the Private Sector in Asia, Canadian Climate Fund for the Private Sector in Asia II, Carbon Capture and Storage Fund, Clean Energy Fund, Cooperation Fund for Project Preparation in the Greater Mekong Subregion and in Other Specific Asian Countries, Governance Cooperation Fund, Integrated Disaster Risk Management Fund, Investment Climate Facilitation Fund, Japan Fund for Poverty Reduction, Japan Fund for the Joint Crediting Mechanism, Leading Asia s Private Sector Infrastructure Fund, Multi-Donor Trust Fund under the Water Financing Partnership Facility, Netherlands Trust Fund under the Water Financing Partnership Facility, People's Republic of China Poverty Reduction and Regional Cooperation Fund, Project Readiness Improvement Trust Fund, Republic of Korea e-asia and Knowledge Partnership Fund, Sanitation Financing Partnership Trust Fund, Urban Climate Change Resilience Trust Fund, Urban Environmental Infrastructure Fund.