Asian Development Bank (ADB)

Multilateral bank with regional footprint across Asia and the PacificTbilisiGeorgia

AstanaYerevan

Kazakhstan

Armenia

Kazakhstan

UzbekistanAzerbaijan

Year of establishment

Ulaanbaatar

Tashkent

Baku

1966

AlmatyMongolia

China

KrygyzAshgabatAAA

Beijing

Bishkek

Korea

Dushanbe

S&P/FitchRatings

Tajikistan

Turkmenistan

Kabul

Afghanistan

Tokyo

Islamabad
Pakistan
Kathmandu
NepalJapan

BhutanHong Kong

New Delhi
Non-regional offices
NARO: Washington, DC, USA
ERO: Frankfurt, Germany
PLCO: Sydney, Australia

India

Dhaka

Nay Pyi TawHanoi

MyanmarBangladesh

Employees globally
Taiwan33

Vietnam

YangonBangkok

Vientiane

Lao People’s
Democratic Republic

ManilaPhilippines

Field offices
ADBHQ
ADB Field Offices
ADB/ PSOD Field Offices

Thailand

Phnom Penh
Cambodia

Colombo
Sr iLanka

3,000+

BruneiMalaysia

Singapore
Suva

Fiji island

JakartaIndonesia

DiliTimor Leste

1

Port Moresby
Papua New Guinea

68 members
49 in the region
40 borrowing members

Achieving S2030 Operational
Priorities through PSO
Integrated approach: sector,
product, thematic priorities andspecial initiatives

2

Private Sector Operations Department (PSOD)
Broadly, ADB has two “financing” departments – Publicand Private sector
PSOD is responsible for all Private sector (orNonsovereign) financing and investments - structuring
and funding investments across the capital structure inprivately held and state-sponsored companies across awide range of industry sectors throughout developing
AsiaEmphasis
isoncommercially
viabletransactions that generate financial returns
while also delivering on ADB's organizationwide mission to promote environmentally
sustainable and inclusive economic growthA 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
3

Public Sector
SovereignOperations

PSOD

NonsovereignOperations

Product Priority Areas
Instrument
Debt

TypesFeatures• Direct loans (core financing modality for PSO)

• Foreign and selected local currencies• Debt instruments (e.g. project / green bonds)• Typical tenors of 7 years (corporate) to 15+ years (project)• Secured or unsecured• Listed and unlisted direct equity• Direct: growth companies at any stage through IPO(cornerstone or anchor investment)• Private Equity Funds (PEF)
EquityGuarantees

Blended FinanceTechnicalAssistance4• Open-ended equity investments (e.g. AIF, CGIF)• PEF: multi-sector and regional funds• Partial credit guarantees (PCG)• PCG: where other lenders are more efficient in mobilizing
local currency or reaching target customers• Partial risk guarantees (PRG)• ADB Ventures: early-stage companies focused on newtechnologies• PRG: frontier markets• Long-term loans at concessional interest rates“blended” with ADB financing• Whenever donor funds managed by ADB are available• Project preparation TA• Enhance corporate governance, environmental and socialstandards, risk management, gender mainstreaming, etc.

• Capacity development TALegend:

HighMediumLow• Applicable for climate mitigation / adaptation or lowincome countries• Develop new products for underserved segments

ADB non-sovereign power/energy projects in Indonesia since 2014
Riau
Gas-fired Power275MW

EIRE Phase 2
Solar Power x 4 sites
42MW total

Tangguh LNG Train 3
3.8 mmtpa gas liquefaction

SarullaGeothermal Power320MW

Muara LabohGeothermal Power80MW

Rantau Dedap
Geothermal Power
91MW
Jawa-1
LNG-to-Power
1,760MW
5EIRE Phase 1 (Tolo)
Wind Power72MW

Case Studies (geothermal)
Sarulla 320MW Geothermal Power Project

Muara Laboh 80MW Geothermal Power Project

Total Project Cost of $1.6 billion
ADB Assistance: $250m ADB direct loan; $80m loan from the Clean Technology
Fund(2); $20m loan from the Canadian Climate Fund for the Private Sector in Asia *Cofinancing:• $479 million in cofinancing from Japan Bank for International Cooperation
Sponsors:• Itochu Corporation, Kyushu Electric Power Company, Ormat International,
Medco Power Indonesia
Development Impacts:• Accelerating development of the Indonesia geothermal sector via thefinancing, implementation, and commissioning of the first geothermal
Independent Power Producer (IPP) in Indonesia in over 10 years; avoiding theemission of 1.3 million tons of greenhouse gases (CO2 equivalent) per annum
Date Approved: 5 December 2013
Date Committed: 28 March 2014

Client: Engie, Sumitomo Corporation, and PT. Supreme Energy
ADB Assistance: $70m loan; $20m parallel loan from the Leading Asia’s Private
Sector Infrastructure Fund; and a $19.25m concessional loan from the Clean
Technology Fund (CTF)
Key Features:• The project will develop, operate, and maintain geothermal steam resources
and an 80MW power generation unit in the Liki Pinangawan Muara Labohconcession area.
• The development of baseload geothermal power plant and avoidance ofcarbon emissions will assist the government’s efforts to achieve sustainablegrowth targets through private sector investment.
• Cofinanced by Japan Bank for International Cooperation and NEXI.
ADB’s Value Addition:• The concessional finance from CTF motivates developers to complete morechallenging exploration programs and reach financial close.
• Demonstrate the bankability of the new geothermal PPA and the replicabilityof structuring solutions to manage complexities and resource risks presented
by geothermal IPPs.
Date Approved: 7 December 2016
Date Committed: 26 January 2017

* Mezzanine Finance6Case Studies (wind & solar)

7

Eastern Indonesia Renewable Energy Project(Phase 1)

Eastern Indonesia Renewable Energy Project(Phase 2)

Client: Vena Energy (former Equis)
ADB Assistance: $56.3m loan; $56.3m loan from the Leading Asia’s Private Sector
Infrastructure Fund; $8.1m loan from the Canadian Climate Fund for the Private
Sector in Asia IIKey Features:• The project involves the construction and operation of a 72 MW wind power
plant in Jeneponto, South Sulawesi, by the Equis Group. The project will be
implemented under a 30-year BOT PPA with PLN, the state-owned electricutility company.
• Equis is one of Asia’s largest independent infrastructure private equity fundmanager with a strong focus on developing renewable energy (RE). The group
operates 4.7 GW of RE assets and is the largest RE IPP in Asia and the Pacific.
ADB’s Value Addition:• Mobilize all required debt package for one of the first utility-scale windprojects in Indonesia. Indonesia’s RE sector has not taken off due to theabsence of supporting regulatory mechanisms, but the project will have apositive demonstration effect for the growth of the nascent RE sector.
• ADB’s long term loan and the concessional loan from CFPS II will mitigate therisk of wind power and raise the project’s financial viability despite therelatively low-tariff environment in Indonesia.
• Play a pivotal role in building a critical mass of first-generation RE project inIndonesia.
Approval Date: 29 November 2017
Commitment Date: 6 December 2017

Client: Vena Energy (former Equis)
ADB Assistance: $12.49m loan; $21.9m loan from Canadian Climate Fund for thePrivate Sector in Asia II; $5.8m loan from Leading Asia’s Private Infrastructure
FundKey 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 inIndonesia. It consists of a 21 MW solar PV power plant in Likupang, NorthSulawesi, and three 7 MW solar PV power plants in Lombok, West Nusa
Tenggara. These solar power plants will supply energy to PLN, Indonesia’snational power utility.
ADB’s Value Addition:• Mobilize all required debt package for the first utility-scale solar PV projects inIndonesia. 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 therisk of solar power and raise the project’s financial viability despite therelatively low-tariff environment in Indonesia.
• Play a pivotal role in building a critical mass of first-generation RE project inIndonesia.
Approval Date: 11 April 2018
Commitment Date: 19 April 2018

What is next?
Opportunities and challenges

1. Renewable Energy and Waste-to-Energy- Impacts from COVID-19 crisis are relatively light compared to other sectors.
- Private Sector investors are still keen to invest in these sectors as long as the economics and risk
allocation regime are fair and predictable.
- Crucial to produce a investable/bankable set of template structure and contracts (e.g. PPA) to enhanceinvestor/lender confidence and predictability.
- Given extensive trackrecord of ADB-PSOD in financing IPPs in Indonesia, PSOD can provide inputs.
[2. Transport- Given the logistical challenges of being a country with 17,000 islands, there is a lot to be done intransport sector, especially seaports and airports.
- Greater involvement of private sector investors by proliferating well-structured PPPs can bring efficiency
in accumulating the much needed infrastructure while expediting the transition to low emission
transportation modes.
- However, business viability of the sector is being severely hampered by COVID-19 crisis.]8