# Presentation: 042981

## Presented by:
Kenneth Reidbord
Senior Commercial Officer/Director
US Commercial Service Liaison Office to the ADB

- Presented by:
**Kenneth Reidbord**
- Senior Commercial Officer/Director
- US Commercial Service Liaison Office to the ADB

## US Commercial Service Liaison Office to the ADB 

**GOAL: **US fair share of ADB market opportunities
**Risk Mitigation**
**Works directly** with U.S. firms/sponsors/private projects developers
**Provides**
- Advocacy/Commercial Diplomacy
- Information
- Procurement Alerts/ Market Briefs
- Market Advice
- Business Facilitation

## US Commercial Service Liaison Office to the ADB 

- Major Distinction:
**REGIONAL RESPONSIBILITY**
- Regional market generated from ADB grants and lending
- 38 countries
- Many active sectors
- Consulting, professional services & procurement

## The Asian Development Bank

**The Asian Development Bank**

- Multilateral development financial institution
- Helps improve the standard of living in Developing Member Countries

- The Asian Development Bank

## The Asian Development Bank

**The Asian Development Bank**

- How ADB helps...
- Policy dialogue
- Loans
- Technical assistance
- Grants
- Guarantees
- Equity investments

## The Asian Development Bank

**The Asian Development Bank**

- Projects and Programs Focus:
- Economic growth
- Human development
- Gender and development
- Good governance
- Environmental protection
- Private sector development
- Regional cooperation

## ADB-Funded Activities by Category

**Loans**
**Technical Assistance Grants**
**Co-financing/Private Sector**

## ADB Main Activities & Business Opportunities

- Business Opportunities for:
- Suppliers of goods and equipment
- Contractors
- Consultants

## US Shareholding and Voting Power(as of Dec 2005)

**US Shares:** 552,210 (15.63% of total shares)

**Votes:** 565,597 (12.80% of total membership,
- 36.43% of total nonregional membership)

**Paid-in capital subscription:** $ 553 million
**Overall Capital subscription:** $7.89 billion

## US Contract Awards - 2006

** ****TOTAL:**** $ 276 million**
- Goods and related services, Civil works:
** ****$ 230 million**
- Consulting Services:
** ****$ 45 million**
- Development Finance Institutions:
-  **$ 79 thousand**

## ADB and the Private Sector

**ADB and the Private Sector**

- Focal sectors:
**Financial**: banks, non-bank financial institutions, SMEs, micro enterprise
**Infrastructure**: energy, water supply, telecommunications

## ADB and the Private Sector

- ADB assistance:
_**Equity investment**_** **
- not to exceed 25% of the total share capital or $ 75 million
- ADB _**cannot**_ be the largest single investor in an enterprise.
- ADB _**does not**_ assume responsibility for managing an enterprise.

## ADB and the Private Sector

- Project Evaluation Criteria:
- Financially viable
- Reasonable cost
- Preference for infrastructure projects awarded thru competitive bidding

## Private Sector Financing

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Private Sector Development

**ADB’s  2000  PRIVATE  SECTOR             DEVELOPMENT STRATEGY**
- PSOD to engage in selected transactions
- Public sector seeks out private sector        	 regulatory reforms
- Public sector looks for private sector 	 opportunities in public sector projects

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Private Sector Development

**ADB’s 2000 Private Sector Development Strategy:**_*** ***_
_***PSOD does discrete transactions***_
- The PSOD has been Very Successful at a Time When:
-  Private Sector Banks Are Struggling
-  Banking System Is Flush With Liquidity
-  Capital markets are dis-intermediating banks
**WHY?**

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Private Sector Development

-    **ADB is an attractive partner in transactions**:
-  ***Catalytic Effect***
- 		“If ADB is in, we are in; if ADB is out 	 	 		we are out”
***Lighthouse effect***
- 	 “The first dollar is the hardest to get; ADB 		is often the needed catalyst”

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Private Sector Development

***Why does the private sector come to ADB?***
-  Not low cost money – market terms
-  Not better credit terms
-  Not an easier/short approval process
_**In short - no preferred terms!**_

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Private Sector Development

- Important Factors
-   Asian institution
-  “One stop shopping”
-   Decision making in region
**THESE ARE NOT UNIQUE ADVANTAGES**

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Private Sector Development

- WHAT IS PSOD’s REAL “**PRODUCT**”?
- NOT MONEY!
-  $4 - $7  Trillion in Surplus Funds
-  Strengthening of the Capital Markets
-  Saving rates are higher in DMCs than
-      in developed countries.

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Private Sector Development

- WHAT IS PSOD’s REAL “**PRODUCT**”?
-  Risk Mitigation
-  Regulatory Dialogue
-  Knowledge Transfer – expertise
**ADB is **_**uniquely**_** positioned in these products!**

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Private Sector Development

_**Infrastructure**_
-  Power
-  Water
-  Telecom
-  Ports
-  Roads
-  SOEs

_**Financial Services**_
- Trade Finance
- Housing
- SME Finance
- Restructuring
- Banking System

** ****CORE OPERATIONS**

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Private Sector Development

**PSOD projects helped by ADB regulatory reform:**
**India**: India Mortgage Guarantee Corp.
**PRC**:  Chengdu Water Supply Project
**Vietnam**: FSPL II
**Bangladesh**: Lafarge Surma Cement Project

**PSOD projects originated by Public Sector:**
**Mongolia**: Trade and Development Bank
**India**: Dahej Liquified Natural Gas Terminal
**India**: Tala Delhi Transmission Project
**Pakistan**: SME Guarantee Facility
**Bangladesh**: AES Meghnaghat Power Project
**PRC**: Chendu Water Supply Project
**India**: LNG Petronet

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Private Sector Development

**PRIVATE SECTOR**
- On the Ground Experience

** ****Public-Private Partnership Is The Key!**

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Private Sector Development

**Private Sector Development**

- Source: Private Sector Development Strategy, March 2000.

**Fight Poverty**
**In Asia**

**Support DMC ****governments in creating ****enabling conditions ****for business**

**Catalyze private ****investments**

**Generate business ****opportunities in ADB ****financed public ****sector projects**

- Source: ADB Presentation, "PSO Role and Dev't Responsibilities," 21/02/07

## Important Contacts

_**Advocacy Center Liaison Office to the ADB**_
**Name:      Kenneth Reidbord, **_**kenneth.reidbord@mail.doc.gov**_
**	****Cecile Santos, **_**cecile.santos@mail.doc.gov**_
**Address:  American Business Center**
**	****25****th**** Floor, Ayala Life – FGU Center**
**	****6811 Ayala Avenue, Makati City 1226, Metro Manila**
**	****Tel.: (63-2) 887-1345; 887-1346; **
**	****Fax: (63-2) 887-1164**
**Websites: **_**www.buyusa.gov/adb**_**, **_**www.adb.org**_