#1ADB Overview of ADB's Private Sector Operations Michael Barrow Director General Private Sector Operations Department Asian Development Bank Tokyo, 7 October 2019#2Table of Contents I. Introduction to ADB II. Why We Work with the Private Sector III. ADB's Private Sector Operations IV. Japanese Partnerships in Nonsovereign Transactions V. PSOD Programs VI. Mobilization of Third-Party Funds VII. Appendix: 2018 and YTD 2019 Case Studies 7 October 2019 2 ADB#3ADB Introduction to ADB#4Tbilisio Yerevan Armenia Georgia Baku Azerbaijan Asian Development Bank (ADB) Multilateral bank with regional footprint across Asia and the Pacific Astana Kazakhstan Almaty Tashkent Kazakhstan Uzbekistan Bishkek Krygyz Dushanbe Ulaanbaatar Mongolia Beijing China Korea 1966 Year of establishment Ashgabat Turkmenistan Non-regional offices NARO: Washington, DC, USA Kabul Afghanistan ERO: Frankfurt, Germany PLCO: Sydney, Australia Tajikistan Islamabad Pakistan Kathmandu O New Delhi Nepal Bhutan India Colombo SriLanka Nay Pyi Taw Myanmar Dhaka Bangladesh Yangon Bangkok O Thailand Hong Kong O Hanoi Vietnam Vientiane Lao People's Democratic Republic Phnom Penh Cambodia Brunei Malaysia Singapore Taiwan Manila Philippines Tokyo Japan AAA S&P/Fitch Ratings 3,000+ Employees globally 33 Field offices ADBHQ ADB Field Offices ○ ADB/ PSOD Field Offices 68 members; 49 in the region 40 borrowing members 7 October 2019 Jakarta Indonesia Dili Port Moresby Timor Leste Suva Fiji island Papua New Guinea PROSPEROUS INCLUSIVE RESILIENT SUSTAINABLE ASIA AND THE PACIFIC 4 ADB#5ADB's Strategy 2030 7 Operational Priorities based on a prosperous, inclusive, resilient & sustainable Asia and the Pacific Addressing remaining poverty and reducing inequalities ADDITION ADB'S VALUE ADDIT AS TRUSTED DE DEVELOPMENT OPMENT PARTNER Knowledge Finance Partnerships Aligned with global c STRATEGY 2030 VISION prosperous inclusive resilient sustainable Using country- focused ASIA AND THE PACIFIC Providing integrated solutions approach Promoting innovative technology ADB'S GUIDING PRINCIPLES 7 October 2019 Accelerating progress in gender equality Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability Making cities more livable Promoting rural development and food security Strengthening governance and institutional capacity Fostering regional cooperation and integration 5 ADB#6ADB's Partnership with Japan ● Japan is a founding member of ADB ➤ Overall capital subscription: $23.04 billion Paid-in capital subscription: $1.15 billion. ➤ Total shareholding: 15.571% Since 1966, Japan has contributed and committed $14.83 billion to Special Funds: 7 October 2019 ADF (committed) $12.89 billion ADBI (incl. committed funds) $272.36 million TASF (committed) JSF (committed) $692.02 million $973.77 million $3.63 million RCIF (committed) Companies and consultants from Japan have been awarded $4.11 billion in procurement contracts on ADB-financed projects 6 ADB#7ADB's Partnership with Japan Projects Number of Projects Cofinanced amount Official Loans 20 $3.34 billion Cofinancing commitments with Japan from 1 January 2014 to 31 December 2018: In addition, Japan has contributed to the following: Single-Donor Trust Funds $814.09 million $55.7 million Japan Fund for Poverty Reduction Asian Clean Energy Fund Official Grants 34 $162.8 million Investment Climate Facilitation Fund $31.5 million Official Equity 4 $51.28 million Japan Fund for the Joint Crediting Mechanism $61.97 million Commercial Cofinancing 12 $5.2 billion Leading Asia's Private Infrastructure Fund $762.13 million Technical Assistance Number of Projects Cofinanced amount Multi-Donor Trust Funds Official Grants 130 $181.97 million Afghanistan Infrastructure Trust Fund $127.5 million Cooperation Fund for Regional Trade and Financial Security Initiative $1 million 7 October 2019 Asia Pacific Project Preparation Facility High Level Technology Fund Domestic Resource Mobilization Trust Fund Clean Technology Fund $40 million $39.4 million $3.9 million $1 billion 7 ADB#8ADB's Partnership with Japan Examples of nonsovereign collaboration with Japanese partners in the infrastructure and finance sectors include: Fe Fuji Electric བག ITOCHU Jera Marubeni Mitsubishi Corporation MI MITSUBISHI HITACHI POWER SYSTEMS KYUSHU ELECTRIC POWER CO., INC. 登 MITSUI & CO. NIKKISO N NIPRO SHARP Sumitomo Corporation Enriching lives and the world JAPAN BANK FOR INTERNATIONAL COOPERATION Tohoku Electric Power Co., Inc. JICA MUFG nexi Japan International Cooperation Agency Bank of Tokyo-Mitsubishi UFJ ✓ Sojitz Corporation sojitz TOSHIBA SMBC SUMITOMO MITSUI BANKING CORPORATION JBIC 7 October 2019 8 ADB#9ADO 2019 Update ASIAN DEVELOPMENT OUTLOOK 2019 UPDATE FOSTERING GROWTH AND INCLUSION IN ASIA'S CITIES SEPTEMBER 2019 ADB ASIAN DEVELOPMENT BANK • • Developing Asia GDP to slow from 5.9% in 2018 to 5.4% in 2019 and 5.5% in 2020 ➤ Gloomier prospects for international trade and evidence of slowing growth in advanced economies, PRC, India and larger economies in East and Southeast Asia Downside risks include further escalation in US-PRC trade conflict and growing public and private debt in developing Asia Inflation across developing Asia to increase slightly from 2.4% in 2018 to 2.7% in 2019 and 2020 ➤ Pressure building on higher food prices, particularly in PRC 7 October 2019 9 ADB#10ADB Why We Work with the Private Sector#11Why the Private Sector is Important • To achieve the Sustainable Development Goals (SDGs) by 2030, the participation of the private sector will be crucial in mobilizing resources, creating jobs, and supporting growth in the region - • The private sector is the source of 90% of all jobs in developing countries and helps drive innovation Needs will only increase and gaps remain significant across infrastructure, trade and financing across Asia G7/G20 and almost all other development finance institutions (DFI) are increasing their emphasis on private sector participation and financing 7 October 2019 11 ADB#12How ADB Can Assist the Private Sector ADB can play a key role in helping to: . Improve the business environment Increase the number of bankable projects Create markets • Crowd-in private financing ADB can multiply the development impact of our interventions by leveraging our: Relationships with governments and private sector clients • . Financial intermediaries for greater reach and diversification Knowledge products and advice on business incubation and PPPS Financial capacity to mobilize even greater amounts 7 October 2019 12 ADB#13Why Private Sector Clients Work with DFIs Environmental, social issues input Global knowledge Government relationships Ability to mobilize capital from additional sources Ability to provide financing not readily available elsewhere Perceived stamp of approval overall The maturity of the financing provided Technical expertise of staff Financial structuring and innovation Competitiveness of funding package Speed of processing 7 October 2019 Local presence -10 0 10 20 30 40 • Percent of clients rating DFI performance above average or high versus commercial banks Clients work with ADB and other DFIs to benefit from both financial and non- financial forms of additionality that they are unable to elsewhere obtain 13 ADB#14Interview at the 52nd ADB Annual Meeting (Video) FAST TALK MICHAEL BARROW Director General, Private Sector Operations, ADB RENEWABLE ENERGY AND THE ROLE OF THE PRIVATE SECTOR 7 October 2019 ADB LIVE STAY TUNED 14 ADB#15ADB ADB's Private Sector Operations#16Private Sector Operations Department (PSOD) ADB • • Public Sector (Sovereign Operations) PSOD (Non Sovereign Operations) Broadly, ADB has two "financing" departments - Public and Private sector PSOD is responsible for all Private sector (or Nonsovereign) financing and investments - structuring and funding investments across the capital structure in privately held and state-sponsored companies across a wide range of industry sectors throughout developing Asia • Emphasis is on commercially viable transactions that generate financial returns while also delivering on ADB's organization-wide mission to promote environmentally sustainable and inclusive economic growth A key objective for PSOD is the mobilization of official and commercial cofinancing through trust funds under ADB administration, B Loans, credit enhancement products, and risk transfers 7 October 2019 16 ADB#17Management Team Infrastructure Central, West and South Asia Infrastructure Diwakar Gupta Vice President Christopher Thieme Deputy Director General Michael Barrow Director General Craig Roberts Senior Advisor East and Southeast Asia and Pacific Financial Institutions Funds, Asset Management and Special Initiatives Shantanu Chakraborty Director Jackie Surtani Director Christine Engstrom Director Janette Hall Director Agribusiness Business Development Social Sectors Portfolio Management Safeguards, Integrity & Development Effectiveness ADB Singapore Office Trade and Supply Chain Finance Craig Roberts Officer-in-Charge Guarantees, Syndications and Risk Transfers Mark Kunzer Director Risk Analytics Vacant Regional Director Equity Investments Martin Lemoine Head Sherwin Pu Head Aniruddha Patil Steven Beck Bart Raemaekers Head Advisor Advisor Timo Teinila Advisor Vacant Head 7 October 2019 17 ADB#18Linkage to ADB's Strategy 2030 Growth priorities for private sector operations New priorities Agribusiness Social Sectors Climate Change Equity Investments Mobilization and Credit Enhancement Local Currencies Inclusive Business and Gender Business Development Infrastructure Financial Institutions and Private Equity Funds Corporate Governance and Integrity Sectors Short-term Financing Loans Instruments 7 October 2019 18 ADB#19Modalities Instrument Typical Size . Debt $20M - $500M Equity $2M - $100M Guarantees $20M - $500M Typical terms 7 years (corporate) to 15+ years (project) LIBOR/ADB cost of fund in local currency + credit spread • Secured or unsecured • When is it relevant? Established company with large balance sheet, strong cash flow Possibility to mobilize co-financing under B Loan or risk participation Growing company in a pre-IPO or pre-trade sale situation 25% ownership maximum • Board seat Minority protection rights Put on the parent company • Partial credit guarantees (PCG): market- based, fees based off lenders' margin • Partial risk guarantees (PRG): market-based, fees based off reinsurance market • • Long-term loan at concessional interest rates to be "blended" with ADB financing First-loss cover For project preparation TA, reimbursable at closing • For capacity development TA, non- reimbursable grant • Where other lenders are more efficient than ADB in mobilizing local currency, or reaching target customers (PCG) ⚫ In frontier markets (PRG) Whenever donor funds managed by ADB are available Applicable for climate mitigation and adaptation projects or low-income countries • For projects in need of additional, concessional financial assistance Donor Funding $5M - $10M . Technical Assistance $0.5M -$1M 7 October 2019 19 ADB#20Focus Areas . . Significantly expand PSO by: broadening sectors, geography, and products, and engaging in new initiatives to maximize development impact on a portfolio basis Decentralize operations to be closer to clients ⚫ Mobilize far greater amounts of official and commercial co-financing via new . products and structures Build markets through local currency offerings, equity investments, and innovative structured products ⚫ Drive innovation and deliver high-level technology solutions Enable project incubation and development • Seamless One ADB approach • Continuous process reforms • Structured approach to screen and measure development effectiveness 7 October 2019 20 20 ADB#21One ADB Approach Aligning our product offering to client needs Regional Department - Sovereign MOF guaranteed senior/subordinated debt and/or equity injection at project or implementation agency level Office of Public-Private Partnership Transaction Advisory Services Technical Assistance through AP3F PPP Project Delivered Source: ADB Technical Assistance Capacity Building Sector/Policy Reform 7 October 2019 - Private Sector Operations Department Nonsovereign Loan guarantee not required Corporate/project debt Equity investment Guarantee products Syndication 21 21 ADB#22Eligible Transactions Located in ADB's developing member countries ADB's target sectors (infrastructure, financial sector, agribusiness, etc.) and themes (climate change, inclusive business, etc.) Developmentally and commercially sound, with a clear business plan Financing not directly guaranteed by the government Clear financing or other need (safeguards support, risk coverage, etc.) from ADB Willing to employ professional advisors (legal, technical, environment and social, etc.) For equity investments, a board seat for ADB and clear exit strategy High demonstrational value and replicability Innovative (new technologies or ways of doing business) ADB Additionalities ☑ Highest integrity and ethical standards Crowding in commercial financing Financial, including (i) various products from debt to equity, credit enhancement and risk mitigation; (ii) local currencies; and (iii) longer tenors and patient investor Non-financial, including (i) stamp of approval; (ii) country risk mitigation, neutral broker role with governments; (iii) safeguards and corporate governance expertise; and (iv) extensive knowledge of markets, sectors, and clients 7 October 2019 22 ADB#23FAST Deals* Standard Deals Notes: Approval Process 1 Concept Review Review of business plan and financials Internal peer review Concept Review Committee review Due Diligence Technical, commercial, legal and safeguards due diligence Finalize term sheet Formal risk rating Disclose safeguards documents • 2 Due Diligence Technical, commercial, Early Review Review of business plan and financials Initial risk rating legal and safeguards due diligence • FAST Committee review • Finalize term sheet • Formal risk rating • Disclose safeguards documents 3 Final Review Investment Committee review Regular Procedure President's review 3 Final Review Investment Committee review President's approval No Objection Procedure 4 Board Approval 21-day circulation to the Board for review Board's approval Proposals less than $100 million without major exceptions to ADB policies, potential for significant safeguards issues, novel financing arrangements, significant financial assistance relative to the size of the DMC Deemed approval at the expiry of the circulation period in the absence of a request for discussion or a sufficient number of abstentions or oppositions (*) Any nonsovereign financing <$20 million for debt and <$10 million for equity. Other requirements apply (e.g. safeguards categorization). 7 October 2019 23 23 ADB#24Portfolio by Product and Sector Committed Exposure of $13 billion as of 31 December 2018 (Inner Circle by Project Count, Outer Circle by Volume) Guarantee Product Exposure Funds 768 Equity 6% 781 6% 37 16% 1,813 15% 34 15% Debt Security 620 5% 148 3% 4 64% 2% Loan 8,497 7 October 2019 68% Sector Exposure Other Agribusiness 237 Transport 402 2% 327 3% 3% Water and Urban 733 9 17 6% 4% 7% 9 50 22% 3% 31 Other Energy 14% 3,182 25% 70 30% Clean Energy 2,382 19% Fin Institutions 4,448 36% 37 16% Funds 768 6% 24 24 ADB#25Portfolio by Region and Country Committed Exposure of $13 billion as of 31 December 2018 (Inner Circle by Project Count, Outer Circle by Volume) Region Exposure Regional 1,333 Pacific 11% 0% Southeast Asia 41 18% 3,886 52 31% 23% Country Exposure SRI Other 1,547 12% IND 2,449 20% 380 BAN3% 433 42 18% 54 24% PRC 31 13% 1,971 16% East Asia 2,021 16% 3% PAK 3 493 0% 1% 4% 6 3% AZE 16 35 15% 777 7% 6% 1% 2% VIE 65 Central and 28% 910 36 1... 14 West Asia 7% 41 1,962 16% 6% 18% 16% THA REG 989 1,342 South Asia 3,276 26% 8% INO 11% 1,189 10% 7 October 2019 25 25 ADB#26Commitments 2016 - 2018 Central and West Asia Armenia Spayka Electric Networks of Armenia Ameriabank FINCA Bank Azerbaijan Shah Deniz South Asia Bangladesh BRAC Bank Eastern Bank Summit Power South East Asia Cambodia Sunseap Solar Power PRASAC Microfinance Equis I/II Muara Laboh Geothermal Power Rantau Dedap Geothermal Power Tangguh LNG Expansion Jawa -1 LNG to Power Hermina Myanmar Myingyan Natural Gas Power Plant Irrawaddy Towers East Asia People's Republic of China Jiangsu Lihua Animal Husbandry Kingenta Ecological Engineering Inner Mongolia Saikexing Breeding China Everbright Renewable Energy Arctic Green Geothermal Power CFPA Microfinance MicroCred Minsheng Financial Leasing State Grid International Leasing Zhujiang Financial Leasing China Water Affairs CWEG CT Environment Beijing Capital Indonesia India India Agri Business Fund II Power Grid Georgia FINCA Bank TBC Bank Kazakhstan Samruk Energy Pakistan Triconboston Wind Power Khushhali Bank MSME Mytrah Wind and Solar Power Ostro Kutch Wind Power ReNew Solar and Wind Power Au Financiers PNB Housing Finance Janalakshmi Financial Services IndusInd Bank Satin Creditcare Network Cholamandalam MSME Capital First Agribusiness Info, Com and Telecom Private Equity Transport Energy Renewable Energy - Other Financial Institutions Water Health Urban 7 October 2019 Annapurna Microfinance True North Fund VI Multiples III Sri Lanka Walkers Colombo Shipyard DFCC Bank MSME Ascent I Philippines Tiwi and MakBan Geothermal Power Green Bonds Pacific Samoa Jarcon Pty and Sun Pacific Energy Thailand Chana Green WTE Gemstone Vietnam Chonburi Natural Gas Power China Everbright International WTE BIDV Regional Agripacific Olam B Grimm Power I/II B Grimm Green Bond Fluidic CreditAccess Asia Micro-Credit Ratings International Creador III Creador IV VI (Vietnam Investment) Fund III Exacta Asia Investment II OrbiMed Asia Partners III DCDC Health Services 26 26 ADB#27Impact DEVELOPMENT EFFECTIVENESS REPORT 2018 PRIVATE SECTOR OPERATIONS MAY 2019 ASIAN DEVELOPMENT BANK ADB 7 October 2019 Results Expected from Projects Committed in 2018 Employment 25,957 Government revenues $725 million Domestic purchases $2,484 million CO₂ emissions reductions 12.1 million tCO₂e Energy generation capacity 5,632 MW Households with access to water 1.5 million Farmers reached MSME beneficiaries 3.0 million 6.1 million Power delivered 35,656 GWh Water supply 3.9 million m³ Wastewater treated 1.8 million m³ www Female MSME beneficiaries People trained 3.8 million 350 Results Achieved by PSOD's Active Portfolio Employment 313,308 Government revenues $2,965 million Domestic purchases $3,973 million Power delivered 36,875 GWh CO, emissions reductions 11.4 million tCO, e Energy generation capacity 7,662 MW Households with access to energy 27,425 Households with access to water 353,280 Water supply 25.1 million m³ Wastewater treated 157.6 million m³ Farmers reached 1.5 million MSME beneficiaries. 6.8 million G Female MSME beneficiaries 5.3 million Students reached 9,455 People trained 322,303 Cargo processed and/or transported 216 million t 27 ADB#28ADB Japanese Partnerships in Nonsovereign Transactions#29INO: Sarulla Geothermal Power Project • Key Features: Accelerating development of the Indonesian geothermal sector via the financing, implementation, and commissioning of the first geothermal Independent Power Producer (IPP) in Indonesia in over 10 years; avoiding the emission of 1.3 million tons of greenhouse gases (CO2 equivalent) per annum. Borrower Country Sector Sub-sector Approval Date Commitment Date ADB Sarulla Operations Limited Indonesia Energy Renewable energy generation - geothermal 5 December 2013 28 March 2014 $250 million (ADB); $80 million (CTF); $20 million (Canadian Climate Fund) Sponsors: ག ITOCHU KYUSHU ELECTRIC POWER CO., INC. Turbine Supplier: TOSHIBA Cofinancier: JBIC $479 million 7 October 2019 JBIC JAPAN BANK FOR INTERNATIONAL COOPERATION 29 29 ADB#30INO: Muara Laboh Geothermal Power Project Borrower Country Sector Sub-sector Approval Date Commitment Date Supreme Energy Muara Laboh Indonesia Energy Renewable energy generation - geothermal 7 December 2016 26 January 2017 $70 million LEAP / CTF $20 million; $19.25 million ADB . • Key Features: The project will develop, operate, and maintain geothermal steam resources and an 80MW power generation unit in the Liki Pinangawan Muara Laboh concession area. The development of a baseload geothermal power plant and avoidance of carbon emissions will assist in the government's efforts to achieve sustainable growth targets through private sector investment. Sponsor and EPC Contractor: Sumitomo Corporation Enriching lives and the world Turbine Supplier: Fe Fuji Electric Cofinanciers: 7 October 2019 JBIC JAPAN BANK FOR INTERNATIONAL COOPERATION jica nexi Japan International Cooperation Agency 30 ADB#31INO: Rantau Dedap Geothermal Development Project-Phase 2 Borrower PT Supreme Energy Rantau Dedap (SERD) Country Sector Sub-sector Indonesia Energy Renewable energy generation - geothermal 23 March 2018 Approval Date Commitment Date 23 March 2018 ADB $175.3 million Clean Technology $50 million Fund 7 October 2019 • Key Features: In 2014, ADB arranged a concessional CTF loan to support Phase 1, which carried out drilling and exploration to quantify and characterize the nature of geothermal resources. Based on the results of Phase 1, Phase 2 will construct, operate and maintain the power project with capacity of 90 MW located in South Sumatra Province. Both Phase 1 & 2 are implemented by SERD, which is owned by PT Supreme Energy, Engie, Marubeni Corporation and Tohoku Electric Power. Sponsors: Marubeni Tohoku Electric Power Co., Inc. EPC and Turbine Supplier: Cofinanciers: JAPAN BANK FOR JBIC Fe Fuji Electric INTERNATIONAL COOPERATION nexi 31 ADB#32Full Steam Ahead for Indonesia's Low Carbon Future (Video) 7 October 2019 32 2 ADB#33MON: Sermsang Khushig Khundii Solar Power Borrower/Guarantor Country Sector Sub-sector Commitment Date ADB LEAP Tenuun Gerel Construction LLC (TGC) as Borrower and Sermsang Power Corporation Public Company Limited (SSP) as Guarantor Mongolia Energy Renewable energy generation - solar 20 March 2019 $9.6 million $9.1 million Key Features: ⚫ The . project involves the construction, operation and maintenance of a 15 MW solar power plant in the Khushig valley in Tuv aimag. The project will generate 22.3 GWH of clean energy annually and reduce Mongolia's carbon dioxide emissions by 26,400 tons per year. • The project benefits from the transfer of technical and operational expertise from Japan and Thailand. SSP, which owns 75% of TGC, is a renewable energy developer listed on the Stock Exchange of Thailand with operations across Asia. Sharp Corporation from Japan, which owns 10% of TGC, is the lead EPC contractor. SSP is a guarantor of the loan. • The project is ADB's first private sector infrastructure investment in Mongolia and first PSOD-EARD joint project. Sponsor and Panel Supplier: SHARP Cofinancier: JICA Japan International Cooperation Agency 7 October 2019 33 ADB#34IND: Kutch Wind Project Borrower Country Sector Ostro Kutch Wind Private Limited (OKWPL) India Energy Renewable energy generation - wind 12 December 2017 Sub-sector Approval Date Commitment Date 25 September 2018 ADB $93 million equivalent in Indian rupees • • • Key Features: The project involves the construction and operation of a 250 MW wind power project in Gujarat. Power will be sold to PTC India Limited at a fixed tariff of 3.46/kWh. The project was awarded through a competitive process under India's first wind energy auction launched in 2016 by the Ministry of New and Renewable Energy. This auction has brought down the cost of wind power from that under the feed- in-tariff regime. The project helps to diversify the energy mix in India by adding renewable energy capacity, reduces the country's dependence on fossil fuels and helps the promotion of cost-competitive, convenient, safe, and reliable new and renewable energy supply options. Sponsors: Jera ~10% stake ✓.OSTRO 100% stake Ostro Kutch Wind Pvt. Ltd. ReNew POWER 100% stake ✓. OSTRO 440-91 Ostro Energy Pvt. Ltd. 7 October 2019 34 ADB#35INO: Jawa-1 Liquefied Natural Gas-to-Power Project Borrower P.T. Jawa Satu Power Indonesia Country Sector Sub-sector Approval Date Commitment Date ADB LEAP Energy Conventional energy generation 29 August 2018 18 October 2018 $185.1 million $120.0 million Key Features: • The project will build, operate, and maintain a 1,760 MW combined-cycle gas-fired power plant in Cilamaya, Karawang, West Java. The assistance will support the development of one of the first and largest power projects using LNG in Indonesia. The project will also provide an affordable power generation source that could increase the penetration capacity of renewable energy sources on the Jawa-Bali grid. . P.T. Jawa Satu Power is owned by (i) Marubeni Corporation, a major Japanese trading house that has net overseas installed capacity of 10,541 MW and is a leading player in IPP business globally; (ii) Sojitz Corporation, a major Japanese trading house; and (iii) PT. Pertamina (Persero), a state-owned company engaged in the energy sector including oil, gas and new and renewable energy. Sponsors: Marubeni Cofinanciers: JBIC JAPAN BANK FOR * Sojitz Corporation sojitz INTERNATIONAL COOPERATION jica nexi JiCA Japan International Cooperation Agency 7 October 2019 35 ADB#36THA: Chonburi Natural Gas Power Project Borrower Country Sector Sub-sector Gulf SRC Company Limited Thailand Energy Conventional energy generation 30 October 2018 Key Features: • The project will build, operate, and maintain a 2,500 MW combined-cycle power plant in the WHA Eastern Seaboard Industrial Estate 1 of Chonburi Province. The project will utilize natural gas and will be the first to employ new high-efficiency technology that reduces pollutants and emissions, providing cleaner air quality and lower carbon footprint. • Gulf SRC is wholly owned by Independent Power Development, a joint venture between Gulf Energy Development Public Company Limited (GED) with 70% of shares and Mitsui & Co., Ltd with 30%. GED is a leading power generation company with the largest portfolio of contracted PPAs in Thailand, focused on gas-fired power plants. Mitsui is one of Japan's largest trading companies and has a track record in developing more than 70 power projects in 21 countries. Sponsor: EPC Contractor and Turbine Supplier: Approval Date Commitment Date ADB LEAP 7 October 2019 2 November 2018 $227.7 million $120.0 million MITSUI & CO. Cofinancier: MI MITSUBISHI HITACHI POWER SYSTEMS JAPAN BANK FOR JBIC INTERNATIONAL COOPERATION 36 ADB#37REG: High Value Horticulture Development Project Borrower Country Sector Sub-sector Approval Date Commitment Date ADB Kunming Hasfarm Flowers (KHF) Regional Agriculture Agriculture products 16 December 2016 1 December 2017 $250 million 7 October 2019 • • • Key Features: The project will scale-up and transfer a successful high-value horticulture business model built on (i) the introduction of climate- controlled greenhouse technology in tropical highlands in Asia; and (ii) the integration of its business downstream into distribution in domestic and export markets. The project will contribute to at least three targets of the Sustainable Development Goals: (i) implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems, and that strengthen capacity for adaptation to climate change; (ii) enhance regional and international cooperation on and access to science, technology, and innovation; and (iii) significantly increase the exports of developing countries. The project will promote gender equality by increasing the proportion of women employees (from 60% in 2015 to 65% by 2020) including in management positions (from 53% in 2015 to 63% by 2020). Hasfarm exports more than 50% of its flowers to Japan using a distribution platform called Greenwings 37 ADB#38REG: Agricultural Value Chain Development Borrower Olam International Limited Country Sector Sub-sector Approval Date Commitment Date ADB JICA Regional Agriculture Agro-industry, marketing, and trade 27 October 2017 28 March 2018 $88 million $75 million One third of soluble coffee produced in Vietnam by this ADB-JICA project exported to Japan Key Features: • Olam is a leading agribusiness company with presence in 70 countries. It differentiates itself by focusing on niche commodities and businesses, buying from growers and village-level agents at the farm gate, and providing value- added solutions and services to customers (e.g., traceability guarantees). ADB's loan will be used to fund Olam's expansion plan over the 2017-2018 period which include large mid-stream projects and working capital investments for smallholder farmer supply in Viet Nam, Indonesia, Timor-Leste, and Papua New Guinea. • $3.0 million TA will support about 13,000 smallholder coffee farmers in Viet Nam Indonesia, Timor-Leste, and PNG. 20% shareholder in Olam International: Mitsubishi Corporation Cofinancier: JICA Japan International Cooperation Agency 7 October 2019 38 ADB#39ADB PSOD Programs#40Trade Finance Program Products Funded Products 1. Revolving Credit Facility (RCF): loans to banks in TFP countries of operation to support pre- and post-shipment transactions 2. Funded Risk Participation Agreement (FRPA): automatically binds the TFP for up to 50% of bank risk in support of funded trade transactions Distribution Product (Cofinance) Risk Distribution Agreement (RDA): TFP leverages capital resources and credit limits by sharing risk Guarantee Products 1. Credit Guarantee (CG): covers up to 100% of bank risk, provided within 24-48 hours 2. Risk Participation Agreement (RPA): automatically binds TFP up to 85% 1. ADB Trade Finance Gap, Growth, and Jobs Survey quantifies market gaps for trade finance and the impact on economic growth and jobs 2. TFP anti-money laundering initiatives help fight financial crime Knowledge Products 3. TFPs' Trade Finance Register helps regulators and financial institutions calibrate risk parameters by creating the first statistics for trade finance on a global industry basis in collaboration with the International Chamber of Commerce (ICC) 4. TFP gender initiatives attract, retain, and promote women in banking 5. Environmental and social safeguards develop measures to ensure sustainability and labor standards in trade 6. Training and capacity building $1.35 billion program size 7 October 2019 40 40 ADB#41Georgia Armenia Trade Finance Program 21 countries of operation, 75 local banks 90% of outstanding exposure in top 4 counties BAN, PAK, SRI and VIE Azerbaijan Tajikistan Afghanistan Pakistan 7 October 2019 Uzbekistan Kazakhstan Kyrgyz Republic Mongolia Nepal Myanmar Bangladesh Sri Lanka 00 Indonesia Fiji Bhutan Việt Nam Cambodia Papua New Guinea Samoa 41 ADB#42Trade Finance Program 150+ international banks in 98 countries 7 October 2019 *Full list of partner banks at www.adb.org/tfp 42 ADB#435,000 4,000 3,000 2,000 1,000 Trade Finance Program TFP Portfolio (2009 to 2018) $8.00 $6.00 $4.00 $2.00 0 I $- 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 7 October 2019 No. of Transactions Supported Cofinancing • Value of Transactions Supported Commitments (ADB Exposure Net of Distribution) 2018 vs. 2017 • 38% increase in value of transactions supported . 33% increase in cofinancing . •28% increase in no. of transactions supported 43 43 ADB#44Trade Finance Program TFP in 2018 Transactions supported (US$) $6.20 billion Cofinancing $3.75 billion 2009-2018 $36.30 billion 2009-2018 $21.60 billion No. of transactions 4,476 SMEs supported 3,475 No. of Intra-regional trade transactions 3,136 2009-2018 21,083 2009-2018 15,688 2009-2018 15,790 Five most active of 21 TFP countries Armenia, Bangladesh, Pakistan, Sri Lanka, Viet Nam 7 October 2019 44 44 ADB#45Trade Finance Program TFP in Japan Sumitomo MITSUBISHI ITOCHU 1,407 $723.75 million Number of Japanese import / export transactions to developing Asia Value of Japanese import/export transactions with 16 countries including Bangladesh, Pakistan and Viet Nam MITSUI & CO. $1.21 billion Value of trade guarantees provided to Japanese banks NISSAN 7 October 2019 1,494 $226.75 million Number of transactions supported with Japanese banks Co-financing with Japanese banks 45 45 ADB#46Supply Chain Finance Program Works with corporates and PFIs to enhance SME access to working capital Post-Shipment Post-Acceptance Financing: How It Works SUPPLIER Sends goods BUYER 2018 Program Highlights 2 Accepts goods and commits to pay at invoice due date Requests payment Makes payment (net of fees) PARTNER FINANCIAL INSTITUTION (PFI) 7 October 2019 5 At invoice due date, pays PFI 4 Binds ADB to risk participation on specific transactions 4 Remits funds in case of funded participation* Remits principal and fees *PFI may use funds on a revolving basis toward ADB pre-approved SCF programs ADB • Transactions supported $217 million Cofinancing $300 million program size $109 million 46 ADB#47Microfinance Risk Participation and Guarantee Program 3333 Provide greater access to finance for the underserved and lower income Transactions Supported population Promote development of the microfinance industry ADB Support Meet unmet demand of microfinance institutions (MFIs) for funding Expand and increase lending at the partner financial institutions (PFIs) level Tenor Coverage Eligible Partners Microfinance wholesale and retail loans, capital market instruments such as bonds and securitizations Credit enhancement through risk participations and guarantees Up to 5 years Up to 50% of the risk per transaction Financial institutions from ADB's developing member countries, subject to eligibility criteria Those of ADB's developing member countries (DMCs) % Eligible Currencies Remove and eliminate FX component of financing for MFIS 7 October 2019 $340 million program size 47 ADB#48Microfinance Risk Participation and Guarantee Program Partners ADB Risk Participation Structure Guarantee Structure Arranger/ Co-guarantor ARC NORTHERN Northern Arc Capital ✓ Standard Chartered Bank Partner Financial Institutions citi Citibank NA (PFIs) Maybank HNB Hatton National Bank Microfinance Institutions (MFIs) Local Currency Lenders (LCLs) Kotak Mahindra Bank IndusInd Bank b RBL Bank Looking to partner with Sumitomo Mitsui Banking Corporation in India and Gojo (Japanese impact investor) in Cambodia, India, Myanmar and Sri Lanka 7 October 2019 48 ADB#49Microfinance Risk Participation and Guarantee Program Accomplishments $1,154,922,970 New loans supported $596,100,018 Cofinancing 5,998,584 Borrowers supported (approximately 95% are women) *as of July 2019 7 October 2019 49 49 ADB#50ADB Mobilization of Third-Party Funds#517,000 6,000 5,000 4,000 3,000 2,000 1,000 Cofinancing and Asset Management COMMERCIAL CO-FINANCING ($MM) FUNDS UNDER MANAGEMENT Leading Asia's Private Infrastructure Fund • $1.5 billion • Debt and Equity jicA Japan International Cooperation Agency Canadian Climate Fund for the Private Sector in Asia • $82 million / $150 million I+I Global Affairs Canada Affaires mondiales Canada 2015 2016 Parallel Equity B Loan Risk Transfer 7 October 2019 Guarantees Cofinancing 2017 2018 Parallel Loan Short-term Finance Climate Investment Funds • $350 million • Concessional Finance CLIMATE INVESTMENT CIF FUNDS 51 ADB#52Commercial Cofinancing Initiatives Catalyzing and mobilizing financial resources for development "Long-term cofinancing target for private sector operations ... with every $1 in financing for its private sector operations matched by $2.50 of long-term cofinancing" ADB Strategy 2030 vate sector solar power developme Mangolia 275 MW Gas Power Project (Indonesia) June 2019 B Loans to include commercial lenders Parallel loans to include multilaterals Partial risk guarantee for commercial lenders MUFG Bank of Tokyo-Mitsubishi UFJ SMBC IFC SUMITOMO MITSUI BANKING CORPORATION 15 MW Solar Power Project (Mongolia) March 2019 First ever cofinancing with Leading Asia's Private Infrastructure Fund (LEAP) in Mongolia's renewable energy sector JICA 7 October 2019 52 52 ADB#53Leading Asia's Private Infrastructure Fund (LEAP) Overview • Progress to Date 7 October 2019 • • • • Launched in March 2016 and managed by ADB $1.5 billion in funding from JICA for parallel and non-parallel co- financing of private sector infrastructure in Asia and the Pacific: Energy (including renewables) Transportation Water & urban infrastructure Information, communications and technology Health Loans and equity investments 5-year investment period Signed: 12 parallel transactions totaling $501 million In process: 9 parallel and non-parallel transactions totaling $165 million 9 of signed and in process transactions have Japanese involvement ($348 million) Pipeline: 17 transactions totaling $1 billion 11 have Japanese involvement ($895 million) 53 53 ADB#54LEAP Portfolio by Country and Sector Exposure 1.8%, Viet Nam 3.8%, Pacific Country Exposure Sector Exposure 2.1%, Health 1.5%, Education 1.5%, 1.5%, Afghanistan Philippines 1.4%, Mongolia 2.3%, Financial Institution 3.0%, Geothermal 3.7%, IT 9.0%, Pakistan $666 36.3%, India 15.9%, Solar 10.0%, Thailand million 7 October 2019 34.7%, Indonesia 0.4%, Public Hygiene $666 million 38.5%, Wind and solar 32.6%, Conventional Power 54 54 ADB#55IND: ReNew Clean Energy Project Borrower SPVs owned by ReNew Power Ventures Pvt. Ltd. Country Sector Sub-sector Approval Date India Energy Renewable energy generation - solar and wind 16 May 2014 Commitment Date 13 June 2014 ADB $195 million LEAP $195 million 7 October 2019 • Key Features: ReNew Power is the largest renewable energy IPP in India in terms of total energy generation capacity. Since commencing operations with a 25.2 MW wind project in Jasdan, Gujarat, the company has grown exponentially, and has a current renewable asset base of over 7 GW, of which more than 4 GW is operational. The project involves the construction of 398 megawatts (MW) of solar power and 311 MW of wind power subprojects across six states in India. Jera ~10% stake ReNew POWER 55 ADB#56REG: DCDC Health Dialysis Network Project Transaction Highlights: $5 million Parallel Equity investment in DCDC Healthcare Services Private Limited (DCDCPL) to expand dialysis and ancillary health services in India to more than 180 centers in 2018 from its current 100 centers in operation. Investment will fund the cost of new buildings, furnishings, and dialysis equipment. Purchase of equipment is under a dedicated availability agreement with Nikisso, Nipro (both Japanese dialysis machine producers), and Fresenius (German). Development Impacts: Investment is aligned with the Government of India's 2016 National Dialysis Program, which aims to add 3,000 new dialysis centers across the country. Expansion of the DCDC network improves access to quality dialysis services for end-stage renal diseases especially in under-served and lower-income populations. Dialysis Machine Suppliers: KISO NIKKISO ∞ NIPRO Investee DCDC Healthcare Services Pvt Ltd Country India Sector Health Investment Type Parallel Equity • Commitment 29 June 2018 Date ADB $5 million LEAP $5 million 7 October 2019 56 56 ADB#57INO: Riau Natural Gas Power Project Country Borrower PT Medco Ratch Power Riau Indonesia Energy Parallel Debt Sector Investment Type Commitment Date 20 March 2019 ADB $70 million Transaction Highlights: $20 million loan for the construction of a 275 MW combined-cycle gas turbine power plant and ancillary infrastructure in Riau province in Central Sumatra, Indonesia. Project is being implemented through PT. Medco Ratch Power Riau, owned by PT. Medco Power, a leading developer and operator of small and medium-sized independent power producers (IPP) in the country, and Ratchaburi Electricity Generating Holding Public Company Limited, Thailand's largest IPP. Development Impacts: Power plant is expected to provide stable and reliable power to the domestic grid, amounting to about 1,445 gigawatt hours annually. The use of combined-cycle gas-fired power generation will improve the environmental sustainability of the current energy mix in Sumatra by displacing diesel and coal as fuels for electricity generation. The project will also contribute to lowering the average power generation cost in Sumatra. LEAP 7 October 2019 $20 million 557 57 ADB#58IND: Avaada Solar Project Company Avaada Energy Private Limited Country India Energy Sector Investment Type Parallel Equity Commitment Date 22 March 2019 ADB LEAP $25 million $25 million Transaction Highlights: . • $25 million equity investment in Avaada Energy Private Limited to expand its solar photovoltaic operating and under construction generation capacity from 593 megawatts (MW) as of December 2018 to 1,991 MW operating capacity by March 2023. Development Impacts: The project will contribute to the strategy of the Government of India to increase the share of renewable energy generation capacity from about 20% in 2018 to 40% by 2030, and help reduce the emission intensity of India's gross domestic product by 33% to 35% by 2030. 7 October 2019 58 ADB#59VIE: Floating Solar Energy Project (Video) 7 October 2019 59 ADB#60ADB Appendix: 2018 and YTD 2019 Case Studies#61Case Studies - Infrastructure VIE: Municipal Waste-to-Energy Project Client: China Everbright International Limited (CEIL) ADB Commitment: $100m loan Key Features: • CEIL is a leading integrated environmental protection company in the People's Republic of China (PRC). CEIL's core businesses are wastewater management, waste-to-energy (WTE), and other renewable energy. Under the project, CEIL will implement a series of WTE plants in Viet Nam. These plants will collectively treat 7,500 tons of MSW daily. The project will be the first municipal WTE project financed entirely by the private sector in Viet Nam. CEIL will use advanced clean technologies, including flue gas emission control, to meet EU standards. ADB's Value Addition: Taking a portfolio approach, efficiently finance multiple WTE plants that are too small, costly, and time-consuming to finance on a stand-alone basis. ADB and CEIL pioneered this approach for CEIL's WTE projects in PRC. The project replicates this in Viet Nam. Demonstration effects by supporting one of the first municipal-level PPPS and showcasing a long-term solution for MSW problems. Approval Date: 1 December 2017 Commitment Date: 2 February 2018 7 October 2019 THA: Southern Thailand Waste-to-Energy Client: Chana Green Company Limited ADB Commitment: $35.3m loan equivalent in bhat Key Features: • . • Agriculture has played an important role in Thailand's economic development but has also led to serious environmental and social challenges in managing the mass amount of residual waste generated from the harvesting process. Waste-to-energy (WTE) technology offers an effective solution by converting agricultural waste into a dependable and renewable source of electricity. The project involves the construction and operation of a 25 MW biomass WTE power plant located in Chana, Songkhla province of Southern Thailand. The plant will convert 825 tons per day of agricultural waste into electricity. Chana Green is wholly owned by Gulf Energy Development, a leading private sector power generation company in Thailand. ADB's Value Addition: • . • Help provide an environmentally sustainable solution to the abundant agricultural waste that is produced from farming and wood industries by converting biomass into a renewable source of electricity. Help reduce the risk perception associated with WTE projects and creates awareness of the benefits and sustainability of WTE that can be applied to other rural communities and DMCs. ADB's long-term (18-year) financing will signal confidence to other banks and developers considering investing in infrastructure assets within the region. Approval Date: 20 October 2017 Commitment Date: 16 February 2018 61 ADB#62Case Studies - Infrastructure REG: ASEAN Distributed Power (Phase 2) PRC: Integrated Urban Water Management Project Client: B Grimm Power Public Company Limited ADB Commitment: $235m loan Key Features: B. Grimm is a major player in the Thailand's small power producer segment. It owns and operates distributed gas-fired cogeneration and renewable power plants. To finance its next phase of rapid growth, B.Grimm has raised equity capital through an IPO and ADB participated in the IPO as a key anchor investor. Proceeds from the IPO and ADB/CCFPS loans will be used to construct new distributed and utility-scale renewable power, gas-fired power, energy storage and associated infrastructure mainly in the ASEAN countries. ADB's Value Addition: . Support B. Grimm in the diversification and expansion of its renewable energy portfolio in the ASEAN region, particularly distributed power plants. ADB's participation in the IPO will not only provide direct financing but also help attracting third-party investors and establishing more confidence in B. Grimm's future access to capital markets. The countries covered are only recently beginning to develop distributed renewable power options, where developers face a range of technical and regulatory challenges. The concessional loan from CCFPS will help to demonstrate a track record of successful financing to encourage private sector developers to take on the higher risk associated with such project. Approval Date: 29 September 2017 Commitment Date: 23 February 2018 Client: China Water Affairs Group Limited (CWA) ADB Commitment: $200m loans • Key Features: • • The project will support CWA to develop and operate integrated urban water management projects, where multiple, interlocking water facilities are developed and operated synergistically. ADB will fund infrastructure which combines water treatment and distribution; (ii) wastewater treatment; and (iii) sewage pipelines developed as PPPs with local governments in second- and third-tier cities. CWA's investments during 2018-2021 are expected to increase or improve treatment capacity for over 10 million m³ per day of water and 1.8 million m³ per day of wastewater, and construct at least 5,000 km of sewage pipelines. This is the third phase of collaboration between ADB and CWA, and more directly emphasizes the integration of the urban water sector. ADB's Value Addition: • • • Raise the profile of integrated urban water management approaches and catalyze their adoption in PRC. Lower transaction costs by bundling together multiple infrastructure subprojects, which are often too small and time-consuming to finance on a stand-alone basis. Collaborate with CWA to expand its environmental and social policies and procedures to encompass all areas of the water value chain, demonstrating international best practices. Approval Date: 24 November 2017 Commitment Date: 2 March 2018 7 October 2019 62 62 ADB#63Case Studies - Infrastructure PRC: Geothermal District Heating Project INO: Eastern Indonesia Renewable Energy Project (Phase 2) Clients: Arctic Green Energy Corporation Private Limited (AGE) and Sinopec Green Energy Geothermal Development Company Limited (SGE) ADB Commitment: $250m loans • • • Key Features: The project involves the construction, acquisition, rehabilitation, and operation of a series of urban district heating systems based on geothermal energy. ADB will finance on a subproject-by-subproject basis, subject to defined environmental, social, development, and financial criteria. Each subproject will involve a PPP arrangement with a municipal government, under which SGE would have exclusive rights to develop geothermal energy resources and network infrastructure, and to deliver heat and related services to residential, commercial, and industrial end users. SGE, the world's largest geothermal district heating company by service area, is 51% owned by Sinopec Group of PRC and 49% owned by AGE, an Iceland- affiliated company incorporated in Singapore. Geothermal facilities developed by the project are expected to reduce greenhouse gas emissions by over 7 million tons CO2-equivalent per year. ADB's Value Addition: Establish more confidence in private sector participation in district heating PPPS in PRC and the use of renewable energy in heating. Raise environmental and social standards for PRC geothermal industry. The portfolio approach will lower transaction costs by bundling a series of subprojects in multiple cities, which are too small and time-consuming to finance on a stand-alone basis. Approval Date: 14 December 2017 Commitment Date: 21 March 2018 Client: The Equis Group ADB Commitment: $12.5m loan; $21.9m loan from Canadian Climate Fund for the Private Sector in Asia II; $5.8m loan from Leading Asia's Private Infrastructure Fund Key Features: . This transaction follows phase 1 of the project where ADB provided financing for a 72 MW wind farm. Phase 2 are the first utility-scale solar PV plants by the private sector in Indonesia. It consists of a 21 MW solar PV power plant in Likupang, North Sulawesi, and three 7 MW solar PV power plants in Lombok, West Nusa Tenggara. These solar power plants will supply energy to PLN, Indonesia's national power utility. ADB's Value Addition: • Mobilize all required debt package for the first utility-scale solar PV projects in Indonesia. Indonesia's RE sector has not taken off due to the absence of supporting regulatory mechanisms, but the project will have a positive demonstration effect for the growth of the nascent RE sector. ADB's long term loan and the concessional loan from CFPS II will mitigate the risk of solar power and raise the project's financial viability despite the relatively low-tariff environment in Indonesia. Play a pivotal role in building a critical mass of first-generation RE project in Indonesia. Approval Date: 11 April 2018 Commitment Date: 19 April 2018 7 October 2019 63 ADB#64Case Studies - Infrastructure INO: Maternity and Child Care Hospital Project A KAZ: Restructuring and Transformation Project A Client: PT Medikaloka Hermina Tbk (Hermina) ADB Assistance: $10m equity and 10m equity from Leading Asia's Private Infrastructure Fund Key Features: Hermina is the second largest private hospital group in Indonesia, operating 28 hospitals with 2,780 beds in 2017. Since it opened its first maternity clinic in 1985, it has developed a chain of general multispecialty hospitals with a continued focus on maternity and pediatric health care services. Hermina's strategic focus is serving emerging and current middle-income segments of the population. Hermina aims to expand to 40 hospitals with 4,000 beds by 2020. Through its partnership with the Jaminan Kesehatan Nasional (JKN), the universal health insurance program of Indonesia, Hermina is contributing to more equitable provision of health care services in Indonesia. ADB's Value Addition: ADB's participation as an anchor investor in the IPO of Hermina in May 2018, helped the company successfully complete an IPO fund raise of $140 million in challenging market conditions. Improve Hermina's environmental and social safeguards standards through the adoption of ADB's standards. Demonstrate viability of a business model that focuses on JKN adoption and contribute to the overall improvement of health care services in Indonesia. Approval Date: 24 April 2018 Commitment Date: 7 May 2018 Client: Samruk-Energy ADB Commitment: $120 loan equivalent in tenge Key Features: Samruk-Energy, wholly owned by the sovereign wealth fund Samruk-Kazyna, is the largest power generation company in Kazakhstan. It owns 31% of the country's installed generation capacity. In 2015, the company adopted a long- term strategy focusing on introduction of new technologies, expansion of renewable energy, and doubling of shareholder value, but several macroeconomic challenges have slowed down the implementation. As part of the government's privatization plan, the company also plans to go for an IPO. ADB's financing will support Samruk-Energy's overall business restructuring and transformation plan aimed at (i) reducing foreign exchange risks; (ii) improving operational efficiency; and (iii) identifying renewable energy opportunities, to attract investors for the IPO. This transaction will be ADB's first nonsovereign transaction with an SOE in Kazakhstan. ADB is also providing a technical assistance to support the restructuring process. Cofinanced by EBRD. ADB's Value Addition: ADB's long-term tenge financing will reduce Samruk-Energy's foreign exchange debt and free up resources for future development and preparations for the upcoming IPO. Approval Date: 15 December 2017 Commitment Date: 8 November 2018 7 October 2019 64 ADB#65Case Studies - Infrastructure THA: Thailand Green Bond Project REG: AC Energy Green Bond Project Client: B.Grimm Power Public Company Limited ADB Assistance: $152.7m debt investment in bonds equivalent in baht Key Features: • • • ADB invests in corporate bonds (green bonds) issued by B.Grimm, a leading energy company in Thailand with a growing presence in other ASEAN countries. It is the first "Climate Bond" certified by the Climate Bond Initiative (CBI), and the first "Green Bond" issued by a Thai energy company in compliance with the International Capital Markets Association's Green Bond Principles (GBP). The bond proceeds are used for the construction and refinancing of 16 solar power plants in Thailand, for a total capacity of 98.5 MW. ADB helped and advised B.Grimm in ensuring compliance with the GBP, and also assisted in B.Grimm's application to the CBI for the Climate Bond certification. ADB's Value Addition: • Help make green bonds and climate bonds better known in the region. Foster confidence among issuers towards green bonds, help promote further investments in renewable energy and other climate-friendly businesses, and enable easier access to funding for these projects. Encourage other players in the market to improve their environmental and social management system as B.Grimm's. Approval Date: 5 December 2018 Commitment Date: 7 December 2018 Client: AC Energy Finance International Limited (ACEFIL) ADB Assistance: $20m debt investment in bonds Key Features: . ADB invests in green bonds issued by ACEFIL. These bonds are in compliance with the International Capital Markets Association's Green Bond Principles, and Climate Bond Initiative (CBI) certification process under its Climate Bond Standards. AC Energy, ACEFIL's parent company and also the bond guarantor, obtained CBI certification upon the advice of ADB. The proceeds of ADB's subscription will only be applied to solar and wind projects in the Philippines, Indonesia and/or Viet Nam. AC Energy is a wholly-owned subsidiary of Ayala Corporation, one of the most diversified conglomerates in the Philippines. AC Energy has developed and grown its Philippine portfolio to over 1,739 MW of gross capacity by end of 2018, expended overseas, and has become a regional renewable energy leader in Southeast Asia. ADB's Value Addition: • Ensure that bonds will comply with the GBP and climate bond monitoring process. • Help make green bonds and climate bonds better known in the region. • ADB's anchor investor role will be catalytic in offering an alternative to the loan markets for financing clean energy initiatives in the private sector. Approval Date: 30 January 2019 Commitment Date: 31 January 2019 7 October 2019 65 ADB#66Case Studies - Infrastructure ARM: Yerevan Gas-Fired Combined-Cycle Power Project MYA: Nationwide Data Connectivity Project Source: Photo courtesy of Siemens, Rousch Power project Client: ArmPower CJSC ADB Assistance: $68.4m loan • Key Features: The project consists of a 250MW gas-fired combined cycle power plant, and associated infrastructure at the site of the plant. The power generated from the project will be sold to Electric Networks of Armenia. ArmPower will develop, own and operate the project. It is owned 60% by Renco Power, a joint-venture between Renco S.p.A. and Societa Italiana per le Imprese all'Estero (SIMEST), and 40% by Siemens Project Ventures (SPV). Renco, an Italian company incorporated in 1979, provides consulting, engineering and construction services for the energy, oil, and gas and civil infrastructure sectors. SIMEST, established in 1991, promotes investments of Italian businesses abroad and provides Italian companies with technical and financial support. SPV is the investment arm of Siemens Financial Services, which is a wholly-owned company by Siemens AG, a global leading technology company. Cofinanced by IFC, DEG and OFID. ADB's Value Addition: • Catalyze long-term debt financing which has limited availability in the domestic market. Enhance the project's environmental and social standards. Establish precedents for future financings of similar independent power producer projects by boosting investor and lender confidence. Approval Date: 16 April 2018 Commitment Date: 15 February 2019 Client: Ooredoo Q.P.S.C. ADB Assistance: $500m loan Key Features: • The project consists of (i) rollout of fixed and wireless broadband services; (ii) upgrade of mobile telecommunication networks; and (iii) acquisition of additional spectrums and licenses in Myanmar by Ooredoo. Ooredoo, headquartered in Qatar, is a leading global telecommunications company that serves almost 120 customers. It has significant geographic diversification, with operations in 10 markets across Asia, the Middle East, and North Africa. Ooredoo is 67% owned by Qatar and is listed on the Qatar and Abu Dhabi stock exchanges. ADB's Value Addition: . • Strong demonstration impact on other multinational and international financiers in proving that private sector infrastructure investments can be successful in Myanmar. Expand Ooredoo's commitment to support and advance inclusive sustainable development by promoting the use of ICT in supporting gender equality and women's empowerment. Reduce gender gap by facilitating women's basic access to ICT and providing ICT jobs, promotion, training, and health services to women. Ensure adoption and implementation of environmental and social safeguards standards. Approval Date: 19 February 2018 Commitment Date: 19 February 2019 7 October 2019 66 ADB#67Case Studies - Infrastructure KAZ: Baikonyr Solar Power Project PRC: Eco-Industrial Park Waste-to-Energy Project Client: Samruk-Kazyna United Green LLP ADB Assistance: $12m loan equivalent in tenge Key Features: • • • The project comprises the design, construction, commissioning, and operations and maintenance of a 50 MW (direct current) ground-mounted solar power plant and integration into the grid in southern Kazakhstan. The main project components will include approximately 150,822 PV panels, 14 central invertor stations, and a substation. Samruk-Kazyna United Green LLP is a joint venture between UG Energy Limited (51%) and Samruk-Kazyna Invest LLP (SKI) (49%). UG Energy is a UK company and part of United Green Group (UGG) while SKI is a subsidiary owned by Samruk-Kazyna JSC, Kazakhstan's sovereign wealth fund. UGG and SKI entered into a partnership in 2014 to develop Kazakhstan's first solar power project, which was financed by the EBRD. Cofinanced by EBRD. ADB's Value Addition: Demonstration effect by showing the viability of solar power projects in a country with an emerging solar power sector. ADB's long term loan is necessary for the project to achieve sound debt service coverage levels over the life of the project and strengthen the momentum towards long-term local currency financing of renewable energy assets. Increase confidence among investors and lenders and promote further private sector investment in renewable energy and power. Approval Date: 10 May 2018 Commitment Date: 27 February 2019 Client: Shanghai SUS Environment Company Limited ADB Assistance: $100m loan equivalent in US dollars, euro, yen and yuan Key Features: SUS is the licensee of Hitachi Zosen Corporation's grate incineration technology, leading equipment provider for waste-to-energy (WTE) plants, and emerging developer of eco-industrial parks (EIPs) in PRC. EIPS aim to minimize the loss of resources by aggregating a series of environmental protection infrastructures such as municipal solid waste (MSW) treatment facilities, sludge disposal facilities, kitchen waste treatment facilities, medical treatment facilities, and sanitary landfills. MSW WTE is used as the core component of EIPs. ADB's loan will support the development of WTE plants in EIPs in second-and third-tier cities in PRC, with an aggregate renewable energy generation capacity of 60MW and MSW treatment capacity of 3,000 tons/day. The project will also support initiatives by the government to procure state-of-the-art technology from an experienced private sector sponsor through build-operate- transfer WTE projects, as well as other waste facilities within EIPS. The project will expand the low-carbon circular economy, increase livability of cities, and tackle climate change through increased renewable energy generation and reduction of landfill-generated methane in PRC. ADB's Value Addition: • • Promote higher industry standards through SUS's incineration technologies that can meet stringent emissions standards. Enhance SUS's environmental and social standards through the adoption of international safeguards standards. Finance a portfolio of WTE projects efficiently and economically and mobilize local commercial banks. Approval Date: 29 November 2018 Commitment Date: 22 March 2019 7 October 2019 67 ADB#68Case Studies - Infrastructure KAZ: Total Eren Access M-KAT Solar Power Project IND: Railways Track Electrification Project WAP 4 22820 आरपीएम रेल INDIAN Client: M-KAT Green Limited Liability Partnership ADB Assistance: $30.5m loan equivalent in tenge Key Features: . The project will build, operate, and maintain a 100 MW direct current solar power plant in southeastern Kazakhstan. The assistance will stimulate the efforts of the Government of Kazakhstan to promote investment in the renewable sector helping replace imports of electricity in power-deficient southeastern Kazakhstan with indigenous renewable sources. M-KAT Green LLP is an SPV that is 100% owned by Total Eren SA. Total Eren is a French IPP company specializing in renewable energy. It develops, builds, and operates renewable energy assets in both developed countries and emerging markets with growing energy needs. ADB's Value Addition: • Provide long-term local currency financing not readily available in Kazakhstan. Create a demonstration effect on other developers and sponsors, thereby helping establish the viability of solar power projects. Ensure development of high environmental and social standards. Approval Date: 14 January 2019 Commitment Date: 8 April 2019 Indian Railways Client: Indian Railways Finance Corporation ADB Assistance: $750m loan equivalent in Indian rupees Key Features: • The Government of India has placed significant emphasis on investing in infrastructure and has developed a 5-year, $132 billion capital expenditure program for the modernization of Indian Railways, which it owns through the Ministry of Railways, and is the third largest railway network in the world. Part of the overall master plan is the electrification of railway tracks which is critical for the movement of goods and people within the country. Electric traction is more advantageous than diesel-powered trains since it is inexpensive to operate, uses renewable energy and recovers energy from braking or slowing down of the train. The project involves electrification of approximately 3,378 route km of existing railway tracks spread across 13 states in India. ADB's Value Addition: • • ADB's 20-year amortizing local currency loan will allow Indian Railways to match the cash flows from the assets to loan repayment with no foreign exchange risk. ADB's participation will help attract private sector insurance companies by way of unfunded risk transfers, which is an important and new source of mobilization. ADB will also provide technical assistance to Indian Railways which will help build capacity on environmental and social safeguards systems required for implementing the railway electrification subprojects. Approval Date: 10 July 2018 Commitment Date: 16 May 2019 7 October 2019 99 68 ADB#69Case Studies - Infrastructure AFG: Kandahar Solar Power Project THA: Bangkok Mass Rapid Transit Project (Pink and Yellow Lines) Client: Barakat Kandahar Solar Energy (BKSE) ADB Assistance: $4.0m loan; $3.85m loan from Canadian Climate Fund for the Private Sector in Asia II Key Features: The project will build, operate and maintain a 15 MW (direct current) ground- mounted solar power plant located in southern Afghanistan, about 24 km southwest of Kandahar. Main project components include (i) about 55,000 photovoltaic panels and 100 inverters; and (ii) a 6 km transmission line. The project is part of several initiatives undertaken by Afghanistan's Ministry of Energy and Water to increase investment in the renewable energy industry in the country. 77 Afghanistan, BKSE's majority owner (90%), was selected among the bidders to implement the project and subsequently entered into a 20-year power purchase agreement (PPA). The PPA will be transferred to BKSE. The remaining shares of BKSE are owned by Burak Unsal of 77 Construction, Contracting and Trading Co. ADB's Value Addition: • Provide long-term financing for private sector solar projects not readily available in Afghanistan. ADB's support, along with its ability to mobilize loans from CFPS II are crucial to meet major market gaps and establish project viability. Ensure adoption of international best practices in environmental and safeguards management. Approval Date: 2 April 2019 Commitment Date: 17 May 2019 Client: BSR Joint Venture ADB Assistance: $311m loans equivalent in baht Key Features: • • • The project will construct and operate two mass rapid transit (MRT) monorail lines, Pink Line and Yellow Line. The Pink Line will operate in Bangkok and Nonthaburi province with a total length of about 34.5 km while the Yellow Line will operate in Bangkok and Sumut Prakarn province with a total length of about 30 km. Through a PPP net cost scheme, the government is responsible for the provision of land and rights of way, as well as the subsidy payment, while the private sector invests in civil works, mechanical and equipment systems, and rolling stock, as well as operation and maintenance. BSR Joint Venture comprises BTS Group, Sino-Thai Engineering and Construction Public Company (STECON) and Ratchaburi Electricity Generating Holding Public Company (RATCH). The concession was awarded to BSR through a competitive and transparent tender process. ADB will provide a loan with longer tenor ("ridership ramp-up tranche") to mitigate the ridership risk following the expiry of the government subsidy. ADB's Value Addition: • • Signal confidence to other financiers and investors and catalyze commercial financing to the MRT sector through the innovative "ridership ramp-up tranche". By supporting the Thai MRT sector from both private sector and public sector (South Purple Line) operations, contribute to the promotion of the PPP schemes, and give assurance to the government that ADB's support is available regardless of the PPP scheme applied to individual lines. Approval Date: 5 June 2018 Commitment Date: 30 May 2019 7 October 2019 69 69 ADB#70REG: Pacific Renewable Energy Program Case Studies - Infrastructure IND: Highway Equipment Finance Project Client: GR Infraprojects Limited (GRIL) ADB Assistance: $23m debt financing equivalent in Indian rupees Key Features: • GRIL is one of the leading engineering, procurement, and construction companies in the roads and highways sector in India. GRIL intends to use ADB funding to purchase new construction equipment and machinery for its execution capacity expansion. The increased operational capacity will enhance GRIL's ability to execute its existing order book and enable it to bid for larger and more complex projects, thus supporting the investment plans of the Government of India in the roads sector. GRIL is majority owned by the Agrawal family, and has years of experience in the road construction industry. ADB's Value Addition: Provide access to medium-term financing to GRIL where such financing is becoming scarce for companies operating in core infrastructure sectors. Help strengthen human resource management system, promote gender equality, and improve social and environment standards by implementing a standardized corporate wide environment, health and safety policy. Approval Date: 16 July 2019 Commitment Date: 9 August 2019 ADB Assistance: $50.0m loan; $50.0 partial risk guarantee Key Features: • • The Program encourages private sector investment in renewable energy by mitigating short term liquidity risk, through a donor-backed standby letter of credit, and supports long-term investment through a partial risk guarantee (PRG). The Program includes one or more of the following forms of financing support: a letter of credit of up to 24 months to cover short-term liquidity risk, drawable by a project company in an amount covering payments due but unpaid under the PPA; (ii) a PRG covering standard political risks and breach of contract under a power purchase agreement (PPA); (iii) a direct loan to the private sector investor or special purpose vehicle; and (iv) technical assistance for transaction advisory support and streamlined project preparation or tender processes. ADB can lend local currencies by providing a partial credit guarantee (PCG) with a local currency lender. ADB's Value Addition: • • Create an enabling environment and address key investment risks to promote private sector investment in the Pacific. Encourage transparency and governance through technical assistance. Approval Date: 17 April 2019 7 October 2019 70 10 ADB#71Case Studies - Financial Sector ARM: Strengthening the Banking Sector for Financial Inclusion > EXPRESS BANKING CASHIN CASH OUT PRC: Green Transport Finance 57 ST 巨献 9月8日~12日 撼动全城 饕餮生日宴 82 Client: Ameriabank CJSC (AMB) ADB Commitment: $30m equity Key Features: • Access to finance in Armenia is problematic particularly for MSMES. 50% of Armenia's 130,000 SMEs have no access to finance and this figure increases to 60-70% in rural areas. Some banks have started to target this segment because of rising demand and higher yields, coupled with better understanding of SMEs. AMB is one such bank and has been identified as a strong partner for ADB to help improve access to finance in the country. AME is the largest bank in Armenia in terms of assets and has a market share of about 17% in total assets. It primarily serves corporate customers (75% of its portfolio) with the remainder comprising SMEs and retail customers. In recent years, AMB has shifted its strategy to emphasize SME lending. AMB has conducted detailed market analysis and plans to roll out products tailored to SMEs' needs. ADB's equity will assist expansion of AMB' SME lending and bolster its capital base. ADB will also provide technical assistance of up to $1 million to support digital banking, IT systems, and risk management investments. ADB's Value Addition: • • • Support AMB expanding lending and new product offerings to SMEs, thus supporting overall economic growth, job creation, and diversification. Provide critically needed long-term, local currency funding in the absence of well-developed capital markets. Fund AMB's capital requirements for FY2018 and support AMB's planned IPO by catalyzing other investors. Approval Date: 27 September 2017 Commitment Date: 22 January 2018 A 32408 Client: Minsheng Financial Leasing Company Limited ADB Commitment: $200m direct loan Key Features: MFL is a private financial institution which was established in 2008 as one of the first five bank-owned financial leasing companies approved and regulated by the China Banking Regulatory Commission. • • • • The transaction is to scale up the deployment of green vehicles, which will mitigate traffic congestion and air pollution. ADB's direct loan will be used to finance the leasing or purchasing of green buses. The green buses eligible for ADB financing will need to meet Euro V- equivalent emission standards and fall within at least one of these categories: (i) energy-efficient and new-energy buses; or (ii) buses running on cleaner fuel such as compressed or liquefied natural gas, or biomethane. MFL will use the proceeds of the B Loan to finance (i) green vehicles, which include green buses as well as other commercial vehicles and passenger cars that meet the same emission standards and fall within the same categories of the green buses; and (ii) batteries and charging stations for electric vehicles. The project will be supported by TA to strengthen the capacity of bus operators by providing information resources and training. ADB's Value Addition: • • Promote green public transport. Support the leasing sector through long-term funding. • Support partnership between public and private sectors. Catalyze private sector funding. Approval Date: 30 August 2017 Commitment Date: 30 July 2018 7 October 2019 71 ADB#72Case Studies - Financial Sector IND: Expanding Credit Delivery for Micro-, Small-, and Medium-Sized Enterprises Project SRI: Improving Access to Finance for Micro, Small, and Medium-sized Enterprises RIKE Client: Cholamandalam Investment and Finance Company (Chola) ADB Commitment: $150m senior secured nonconvertible debentures in Indian rupees Key Features: • Based in Chennai, Chola is a pan-Indian nonbank financial company (NBFC) selected by ADB for its track record in providing finance to MSMEs in logistics and distribution services, which are critical for job creation and overall economic growth. Chola is an attractive partner for ADB, as 70% of its total portfolio is in states with a lower level of penetration by banks and formal financing institutions; in addition to its strong credit profile and good governance standards. ADB will provide longer-term financing to Chola, for on-lending to MSMEs, at least half of which will be from the lagging states. ADB's financing will meet Chola's requirements for scarce medium-term funds, which will help fund longer-tenor MSME loans and diversify Chola's funding mix. Given the slowdown in credit growth from banks in India, ADB's funding will also have a countercyclical benefit on MSME's access to finance, translating into balanced regional economic growth and employment. ADB's Value Addition: • Support growth and job creation in India's MSME segments, through improved access to finance, and in a period where commercial banks have slowed their pace of lending for this segment. Provide longer-tenor debt in local currency. Approval Date: 8 December 2017 Commitment Date: 7 August 2018 Client: DFCC Bank PLC ADB Commitment: $35m loan Key Features: . • DFCC is a universal bank with business lines including corporate banking; business banking targeting medium-sized firms; and branch banking, which serves micro and small enterprises and retail customers. ADB has a relationship with DFCC and its former subsidiary DFCC Vardhana Bank (DVB). DVB joined ADB's Trade Finance Program in 2004 and received a $15m loan for housing finance in 2012. DFCC is also a participant in ADB's SME Line of Credit Project. ADB's financing will support DFCC's funding requirements for medium-term funding, which is in short supply. This will enable the bank to provide longer- tenor micro, small, and medium-sized enterprises (MSMEs) loans and help the bank diversify its funding sources. ADB's Value Addition: • Provide access to longer-tenor debt in support of MSMEs, whose ability to access funds is constrained. Strengthen DFCC's outreach to women entrepreneurs and bolster internal policies on women. Approval Date: 16 May 2018 Commitment Date: 15 August 2018 7 October 2019 12 72 ADB#73Case Studies - Financial Sector PRC: Financing Micro, Small, and Medium-Sized Enterprises in the Western Region VIE: Mainstreaming Small and Medium-Sized Enterprises Lending Project 買! 少光公售豬肉≥- 质 DÙNG SỬ Client: Microcred Nanchong Company Limited ADB Commitment: $19.7m loan Key Features: MicroCred Nanchong is fully owned by MicroCred China Limited (MCL), and is registered in Sichuan, one of PRC's poorest provinces. It had built a long and successful record in providing unsecured microloans to MSMEs in Sichuan province. MCL has strong shareholders (majority owned by Baobab, with other shareholders including IFC, KfW and Developing World Markets), sound corporate governance, experienced management team, developed risk management systems, and satisfactory financial performance. ADB's loan supports lending operations to micro, small, and medium-sized enterprises in the underdeveloped western region of PRC. By providing access to finance, the project will support the expansion of small businesses and generation of additional employment opportunities, which will in turn contribute to poverty reduction. ADB's Value Addition: . Provide access to longer-tenor finance to help fill MCL's funding gap to support its expansion. MicroCred Nanchong does not have access to deposits and faces difficulties in obtaining finance from commercial banks. Support effective gender mainstreaming through the gender action plan by targeting more than 10,000 female borrowers. Approval Date: 6 August 2018 Commitment Date: 5 November 2018 Client: Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) ADB Commitment: $200m direct loan and $100m B loan Key Features: • ADB will provide longer-tenor funding to BIDV to support the growth of its lending to SMEs and provide critically needed financial products to this underserved segment. BIDV is the largest lender to SMEs in Viet Nam, having it as a priority in line with the government's efforts to boost lending to this segment. BIDV is 95.3% state-owned through the State Bank of Vietnam; 4.7% is publicly listed. ADB's Value Addition: • Provide access to longer-tenor debt not readily available in Viet Nam and support the growth of SMEs. Part of ADB financing will be earmarked for SMEs in rural areas as well as SMEs owned by women. Mobilize private sector financing for BIDV to help close its funding gap. ADB may also transfer some of its risk to private sector insurers. ADB will also provide technical assistance to strengthen BIDV's risk management and environmental and social management systems; (ii) support investments in BIDV's digital strategy; and (iii) develop systems to track female borrowers and create a strategy and products to support this important market segment. Approval Date: 29 August 2018 Commitment Date: 23 November 2018 7 October 2019 73 ADB#74Case Studies - Financial Sector PRC: Small and Medium-Sized Enterprises Finance in Underdeveloped Regions Project IND: Expanding Micro, Small and Medium Enterprise Lending Client: Zhujiang Financial Leasing Company Limited (ZFL) ADB Commitment: $58.9m loan Key Features: • ADB will provide longer-tenor financing to ZFL for lease finance to small and medium-sized enterprises (SMEs) located in the underdeveloped central and western regions of PRC. ZFL was established in 2014 as a wholly-owned subsidiary of one of PRC's leading rural commercial banks, Guangzhou Rural Commercial Bank, and is a leasing company regulated by the China Banking and Insurance Regulatory Commission. ZFL's operations have a strong development focus, sound corporate governance, experienced management team, developed risk management systems and good financial performance. ADB's Value Addition: • • Provide access to longer-tenor debt in support of SMEs in underdeveloped regions of PRC, which face significant barriers in accessing finance. Help ZFL develop more longer-tenor leasing products for SMEs and improve its asset-liability profile. Enhance ZFL's environmental and social safeguards capacity. Approval Date: 27 July 2018 Commitment Date: 27 November 2018 Client: Capital First Limited (CFL) ADB Commitment: $148m senior secured non-convertible debentures equivalent in Indian rupees Key Features: • • Established in 2012, CFL is a retail lender serving the financing needs of underbanked salaried and self-employed individuals and MSMEs, which comprise India's "missing middle". CFL's growth has been underpinned by its successful development of products and services tailored to the needs of its target customers based on new technologies and deep analytics, enabling rapid credit decisions and superior customer service offered through various delivery channels. ADB funding will support the growth of CFL's lending to MSMEs. ADB will also provide technical assistance of up to $200,000 to support CFL's capacity building on environment and social safeguards. ADB's Value Addition: • Support MSME growth and development of the missing middle. Support the advancement of India's emerging lower middle-income segment. Diversify and increase the tenor of CFL's liabilities to better match the funding needs of its MSME lending. Approval Date: 29 September 2017 Commitment Date: 29 November 2018 7 October 2019 74 ADB#75Case Studies - Financial Sector CAM: Expanding Micro, Small, and Medium-Sized Enterprise Lending Project IND: Supporting Access to Finance for Women in Rural Areas Project MICKEY COOCKS 9120618/07:39 Client: PRASAC Microfinance Institution Limited ADB Assistance: $40m loan Key Features: The project will support the growth of PRASAC's financing portfolio for micro, small, and medium-sized enterprises (MSMEs), providing needed financial products and services to this underserved segment. PRASAC has prioritized the development of its MSME financing business line, emphasizing MSMEs led by women. PRASAC was established in 1995 as a development project funded by the European Union to rehabilitate and support agricultural development in 6 provinces in Cambodia. The company evolved over the years and became a microfinance institution, providing credit to rural communities and microenterprises throughout the country. Present shareholders include Lanka Orix Leasing Company (70%), a leading financial service conglomerate in Sri Lanka, Bank of East Asia (21%), the largest independent local commercial bank in Hong Kong and, PRASAC Staff Company (9%). ADB's Value Addition: • Provide access to longer-tenor debt to support growth and reduce certain risks and to diversify its funding sources. Promote gender equality and/or women's empowerment in PRASAC's business activities through the gender action plan. Approval Date: 17 July 2018 Commitment Date: 18 December 2018 Client: Annapurna Finance Private Limited ADB Assistance: $30m equity; $20m debt security Key Features: • . Annapurna has been part of ADB's Microfinance Risk Participation and Guarantee Program since 2014. It is one of the largest MFIs in India with the majority of its portfolio in lagging states and rural areas. Annapurna's largest shareholder is Oman India Joint Investment Fund, a growth capital private equity fund focused on investing in the mid-market segment in India. The Belgian Investment Company for Developing Countries, a bilateral development bank, holds about 14%. The transaction will support Annapurna's growth as it expands its lending presence in eastern and central India and diversifies across underpenetrated regions of India. This will be Annapurna's first partnership with a multilateral institution. ADB's investment will be used to finance (i) microfinance loans to women customers under the self-help group and joint liability group models; (ii) other small loans to individuals and micro and small enterprises; and (iii) affordable housing loans. ADB will also provide capacity building technical assistance of up to $500,000 to support Annapurna in key areas such as gender mainstreaming, including skills development of its customers and risk management. ADB's Value Addition: Through ADB's nominee on Annapurna's Board, Annapurna will benefit from ADB's experience and knowledge in some of its core business areas, such as MSE finance, rural finance, and affordable housing finance. Strengthen the capital of Annapurna and provide longer-tenor debt. Support Annapurna's adherence to high corporate governance and adoption of market leading risk management, social, and environmental standards. Approval Date: 14 November 2018 Commitment Date: 27 December 2018 (for equity only) 7 October 2019 15 75 ADB#76Case Studies - Financial Sector GEO: Low-Income Housing Finance PRC: Health Care Finance in Underdeveloped Provinces 20 Client: Credo Bank JSC ADB Assistance: GEL 60 million loan and $0.5 million technical assistance Key Features: ADB signed a long-term loan agreement with Credo Bank to support the launch of housing finance products targeting low-income clients for home renovation and construction in rural Georgia and the periphery of the capital. Since 2014 Credo is owned by a consortium led by Access Microfinance Housing AG. In 2016, ADB provided a $23m loan and technical assistance (TA) to support Credo in its transformation from microfinance lender to a bank, which materialized in March 2017. More than half of Credo's 230,000 strong clientele are women, predominantly representing rural and farm households that generate income from farming and business, including agritourism. ADB's Value Addition: Provide needed long-term funding for housing in Georgia, enable affordable loans to lower-income segments and improve the livelihood of rural dwellers. Support Credo's initiatives to serve lower-income homeowners, and thereby help reduce rural poverty and improve living conditions in rural Georgia. ADB will provide a TA to support Credo's efforts to extend reach to rural clients in 1700 additional villages, benefiting an estimated 30,000 women clients via branchless banking services and targeted financial literacy initiatives. Approval Date: 5 December 2018 Commitment Date: 17 April 2019 Client: Far East Horizon Limited (FEH) ADB Assistance: $150m direct loan; $200m B loan Key Features: • • FEH is one of PRC's leading leasing and financial service groups and is listed on the Hong Kong Stock Exchange. Established in 1991, FEH has developed significant experience in healthcare leasing, especially in the underdeveloped central and western regions of PRC. The project will provide longer-tenor financing to FEH to offer lease finance, through its wholly-owned subsidiary International Far Eastern Leasing, public hospitals in the 12 least-developed provinces of PRC. ADB's Value Addition: to • • • Provide critically needed long-term finance which will support FEH's longer-tenor lease products for health care and increase its capacity to expand its operations, especially in county hospitals in underdeveloped regions. Enhance FEH's environmental and social safeguards capacity and strengthen its policies to support more gender inclusivity. Diversify FEH's long-term funding base by mobilizing private sector cofinancing. Approval Date: 16 November 2018 7 October 2019 Commitment Date: 28 June 2019 16 76 ADB#77Case Studies - Agribusiness BAN: Second PRAN Agribusiness Project T Client: Sylvan Agriculture Limited (SAL) ADB Assistance: $14.2m loan Key Features: ADB's loan will support SAL's expansion into potato chips, potato flakes, and pasta through the financing of new processing facilities located in Habiganj Industrial Park. SAL will procure potatoes under contract farming arrangements and provide secure income to 2,000 smallholder farmers. The project will promote inclusive business given the high poverty reduction impact at both farming and factory levels. The project will also achieve effective gender mainstreaming through the adoption of a gender action plan. The project is a repeat assistance to SAL, whose existing starch and liquid glucose manufacturing facilities (procuring cassava from contract farmers) were also financed by ADB in 2012. SAL is owned by PRAN-RFL Group, one of the largest manufacturing groups in Bangladesh and the market leader in food products. It has been developing farmer engagement through contract farming since the 1990s. PRAN has contracted about 100,000 farmers across various crops, from whom it procures for its various agribusinesses. ADB's Value Addition: Provide long-term US dollar funding, which is not readily available in Bangladesh. Promote higher environmental and social standards through compliance with ADB's policy requirements. Promote gender equality through a gender action plan which includes creation of job opportunities for women and assistance to women contract farmers through technology-based applications. Approval Date: 10 December 2018 Commitment Date: 19 March 2019 7 October 2019 77 ADB#78Case Studies - Private Equity REG: Exacta Asia Investment II, L.P. REG: Creador IV, L.P. HEMATOLOGY ECTION CHEMISTRY SECTION JAPAN Ofaday Client: Exacta Asia Investment II ADB Commitment: $25m equity Key Features: . . • A private equity fund with a target capitalization of $250 million. Exacta Il will invest in domestic consumption-driven business and export-oriented manufacturing companies in Southeast Asia Investing in Exacta II would allow ADB to participate in Southeast Asia's continued economic growth while providing development benefits. Exacta II will be managed by Exacta Capital Partners, a private equity fund manager that invests in lower middle-market companies whose growth is driven by domestic consumption and/or exports, and has built in-depth knowledge and expertise in industries such as food and beverages, healthcare, business services, and manufacturing. ADB's Value Addition: • • • Help deepen capital markets in the Southeast Asian countries for lower middle- market companies who often struggle to find growth capital. Support the development of the private sector in countries where equity- related financing is limited. Raise standards on important governance matters, which are critical for companies to demonstrate as they seek additional sources of growth capital. Help mobilize additional financing from third-party sources. Approval Date: 12 July 2018 Commitment Date: 19 October 2018 Client: Creador IV, L.P. ADB Assistance: $50m equity Key Features: A private equity fund with a target capitalization of $500 million that seeks to invest growth capital into middle market companies in India, Indonesia, Malaysia, Philippines, Sri Lanka, and Viet Nam. Focus sectors include financial services, consumer goods and services (including healthcare), business services and manufacturing. Creador IV will be managed by Creador, one of the leading private equity fund managers in the region, having developed in-depth market knowledge and domain expertise within its targeted sectors. ADB is an existing investor in Creador III, L.P. having committed $40.9m to the $419m fund in 2015. Consistent with Creador III, ADB will have a seat on the advisory board of Creador IV. ADB's Value Addition: Further raise the visibility of the capital needs in Creador's targeted sectors, and help catalyze institutional and non-institutional participation in other private equity funds investing in middle-market companies in South and Southeast Asian markets. Further enhance Creador IV's environmental and social management system. Potentially provide debt and equity financing directly to Creador's portfolio companies to help them grow and to mobilize additional financing from third- party sources. Approval Date: 24 September 2018 Commitment Date: 11 December 2018 7 October 2019 78 ADB#79Case Studies - Private Equity MYA: Ascent Myanmar Growth Fund I L.P. IND: Multiples Private Equity Fund III Limited Client: Ascent Myanmar Growth Fund I L.P. (AMGF) ADB Assistance: $10m equity Key Features: . A private equity fund with a target capitalization of $100 million. AMGF will invest equity capital for growth purposes in middle-market companies, including SMEs, operating in Myanmar. Focus sectors include consumer, education, financial services, healthcare, and technology, media and telecommunications. Ascent Capital Partners, a newly established Singapore-registered private equity fund manager, is responsible for implementing the investment. It is supported by anchor investors including two reputable and successful entrepreneurs in Myanmar; and Temasek Capital Management. ADB's Value Addition: • Catalyze private sector investment in Myanmar and encourage international investment and governance best practices in the fund's investee companies. Help Ascent Capital adopt an environmental and social management system which will be applied to portfolio companies' operation, and a gender inclusive policy against which the proposed investments will be screened. Provide funding that will enable AMGF to provide long-term equity capital that will benefit fast-growing companies to scale up, contributing to the growth of Myanmar's nascent economy and capital markets. Approval Date: 11 December 2018 Commitment Date: 21 December 2018 Client: Multiples Private Equity Fund III Limited ADB Assistance: $35m equity Key Features: . A private equity fund with a target capitalization of $750 million, Multiples III will invest in growth stage opportunities in middle-market companies in India. It may also selectively consider control-oriented and early-stage investment opportunities. Target sectors are consumer, finance, healthcare, and technology. The fund will be managed by Multiples Alternate Asset Management Private Limited, an Indian-focused, independent, and well-respected private equity fund manager that has raised two funds totaling $880 million in committed capital and invested nearly $700 million across 20 investments. Multiples III will help (i) provide growth capital to private sector companies and catalyze their development while tapping into India's growing middle class; (ii) support the Indian government's efforts to increase the transparency and efficiency of the economy by improving corporate governance of portfolio companies; and (iii) contribute to private sector job creation and increased tax revenues for the Government of India. ADB's Value Addition: • As an anchor investor, help attract additional institutional capital to enable the fund to reach its target size. • Help develop and adopt an environmental and social management system (ESMS) that will oblige its portfolio companies to comply with ADB's SPS. Promote gender equity in certain investee companies of the fund. • Approval Date: 13 December 2018 Commitment Date: 31 December 2018 7 October 2019 79 ADB