AU-EU WORKSHOP ON RESOURCES FOR THE JOINT AU-EU STRATEGY (JAES): FIRST ACTION PLAN

Transcription

1 AFRICAN DEVELOPMENT BANK GROUP AU-EU WORKSHOP ON RESOURCES FOR THE JOINT AU-EU STRATEGY (JAES): FIRST ACTION PLAN ADB S S FINANCING INSTRUMENTS ADDIS ABABA LAMIN MANNEH ANTHONY NYONG

2 AFRICAN DEVELOPMENT BANK GROUP OUTLINE 1. Traditional Funding instruments 2. Special Funds 3. Ad Hoc Special Funds 4. Trust Funds 5. Conclusion

3 AFRICAN DEVELOPMENT BANK GROUP INTRODUCTION ADB is lead financial institution in Africa and Plays a triple role: Catalytic Financier Strategic Partner Knowledge Broker ADB is catalytic financier but still a bank Therefore complies with Banking principles Ensures its sustainability & credibility Safeguards its triple A rating Bankable projects/programmes - Selectivity

4 AFRICAN DEVELOPMENT BANK GROUP THE ADB S FINANCING INSTRUMENTS 1. Traditional Funding instruments The Bank s traditional financing hinges on: Project and programme financing Budget support Financing essentially country based (Country Strategy Papers - CSPs) Now Upscaling regional operations

5 AFRICAN DEVELOPMENT BANK GROUP THE ADB S FINANCING INSTRUMENTS The Bank s traditional financing uses 2 key windows: ADF window concessional window lending to poorer African countries; and ADB window non concessional window lending to MICs at market rate

6 AFRICAN DEVELOPMENT BANK GROUP THE ADB S FINANCING INSTRUMENTS 1. ADF window concessional window replenished every 3 years performance based country allocations Current ADF-XI billion Infrastructure-financing stepped up Likewise 17.5% to regional operations Contribution regional ops buy in

7 AFRICAN DEVELOPMENT BANK GROUP THE ADB S FINANCING INSTRUMENTS ADB window non concessional window lending to MICs at market rate Eligible countries essentially, North African countries and Southern African countries Annual average disbursement of about US$ 3 billion

8 THE ADB S FINANCING INSTRUME NTS Private Sector Lending lending to eligible private sector companies capital and governance structures, regulatory/legislative protection Direct lending or equity participation 2008 US$ 1.2 billion 2009 target is US$ 2 billion Partnership with certain regional IFIs Developing PPPs

9 THE ADB S FINANCING INSTRUMENTS 1. Regional Operations Financing Challenges Granting of loans to countries or regional organizations/institutions Mixed neighbourhoods blending Sequencing, based on prioritization; resource availability Alignment and co-ordination of regional, country and sector strategies Enhance implementation by fostering strategic partnerships with other ROs and donors

10 THE ADB S FINANCING INSTRUMENTS Special Funds and Facilities NEPAD Infrastructure Project Preparation Facility NEPAD IPPF African Water Facility (AWF) ( 33 million -2009) Fragile State s Facility (ex PCCF) Middle-Income Countries Facility (MICF) Congo Basin Forest Fund Infrastructure Consortium for Africa (ICA) ClimDev Special Fund for Reconstruction & Devt. GLR

11 THE ADB S FINANCING INSTRUMENTS pecial Funds & Facilities NEPAD IPPF Set up seed-funded by Canada Now a multi-donor facility currently US$ 24 m Purpose: mobilization technical & financial res. identification and upstream preparation of regional infrastructure projects, for funding by Bank or other financiers, to address both supply & demand side constraints Capacity building - to formulate bankable infrastruc. devt projects & programs - attract public & private investments.

12 THE ADB S FINANCING INSTRUMENTS pecial Funds & Facilities: FSF Transformation of PCCF into FSF, UA million: an ADF-XI allocation UA 408 million & PCCF carry-over of UA million. Autonomous entity with three grant support windows: Supplemental Support Window: scaled up Bank support: engaging eligible fragile states; Arrears Clearance Window: assist in arrears clearance of eligible states to gain access to HIPC MDRI; and Targeted Support Window: supplemental targeted support: CB & KM

13 THE ADB S FINANCING INSTRUMENTS Ad Hoc Special Funds and Facilities mergency Liquidity Facility (ELF) US$1.5 illion (limits 150 & 50 m) Trade Finance Initiative (TFI) US$1 billion Tr. Fin. banks & instits) African Food Crisis Response UA 497 illion (US$ 650 million) UA 20 million udget support Fertilizer Facility

14 THE ADB S FINANCING INSTRUMENTS mergency Liquidity Facility (ELF) Established in March 2009 in wake of unfolding inancial crisis US$ 1.5 billion package Short-term unexpected funding needs resulting rom financial crisis Eligible: countries, public/private IFIs and projects sovereign & non sov. In ADB countries; non-sov. In ADF countries) subject to debt-carrying apacity Lending ceilings: 150m/country & 50m IFI/project

15 THE ADB S FINANCING INSTRUMENTS ade Finance Initiative (TFI) Like ELF established in March 2009 in response to inancial crisis credit squeeze, hike in cost etc. US$1 billion as LOC to Trade financing banks, DFI similar institutions tandard selection criteria apply: strategic lignment, commercial viability, devt. outcomes, omplementarity, additionality etc eet Bank s credit rating standard (risk rating 6 or etter

16 THE ADB S FINANCING INSTRUMENTS Trust Funds Various types of bi- and multilateral trust funds managed by Bank Group Used to fund studies, consultancies, partnerships and components of some projects/programmes

17 THE ADB S FINANCING INSTRUMENTS CONCLUSION B Catalytic Financier - Strategic Partner - Knowledge Broker

18 THE ADB S FINANCING INSTRUMENTS AP Today Preliminary Results of the 2006 Review: 205 Projects: 62 facilitation projects (52 in 2002) 17 capacity building projects (18 in 2002) 62 study projects (18 in 2002) 64 investment projects (36 in 2002) ctor distribution: 54 in the energy sector 35 in the water sector 99 in the transport sector 16 in the ITC sector 1 multisector project

19 SOME PROJECTS IMPLEMENTED UNDER STAP 14 projects have been completed 79 projects are under implementation; ADB Group funded 37 Infrastructure Projects and Programs ( ) for a total commitment value of US$ 1.34 billion; Co-financing mobilised: more than US$ 1.6 billion;

20 SOME STAP PROJECTS AND DISTRIBUTION TELECOMMUNICATION SAT 3, RASCOM, EASSy, ENERGY Power Interconnections, African Gas Pipeline, TRANSPORT Transport and Road Transit Facilitation Programs (e.g. Dakar-Bamako & Accra-Ouagadougou- Bamako axis, Kenya- Ethiopia (Isiolo-Moyale segment, Arusha- Namanga Athi River Road, etc);