The Asian Development Bank (ADB) is strengthening its public-private partnership (PPP) credentials with the first formal co-advisory framework between a multidimensional development bank and international commercial banks. It is supported by a $64 million fund from Japan, Canada and Australia
The agreement was formalized in Baku along with the ADB's 48th annual meeting which runs from May 2 to 5. In formalizing its relationship with the private sector for PPP advisory services, ADB said it strategies to take advantage of the "in-depth market experience" the commercial banks can give.
ADB signed the PPP co-advisory treaty with eight global banks: Japan's Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank and Sumitomo Mitsui Banking; France's BNP Paribas, Credit Agricole CIB and Societe Generale; the U.K.'s HSBC; and Australia's Macquarie Capital.
An office specifically for PPP advisory work, from project planning to finance had been set up last year by The Manila-based multifaceted investor. More countries are expected to contribute to the supporting fund kicked off by Japan with the support of Canada and Australia.
Ryuichi Kaga, head of ADB's new PPP office commented "Although there is keen interest to attract private investment into infrastructure, many countries in the region struggle with key success factors, namely adequate implementation resources to prepare, structure and place transactions in accordance with international best practice.”
By stepping up in Asia’s PPP activities, the ADB has confidence to attract more private funding for railways, ports, roads, power plants and other major projects.
ADB Managing Director General Juan Miranda, who signed the agreement on behalf of ADB said “Coupling the in-depth market experience of the global banks with ADB's PPP expertise in developing Asia and strong relationships in the region should help public sector clients structure successful, bankable PPPs without crowding out private sector advisors."