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ADB signs first public-private partnership deal with global banks

TOKYO, May 4 (KUNA) -- The Asian Development Bank (ADB) on Monday signed a public-private partnership (PPP) co-advisory agreement with eight global commercial banks, a move aimed at accelerating the flow of private funds into critical infrastructure projects in developing Asia.
The agreement, signed in Azerbaijan's capital Baku on the sidelines of the annual meeting of the ADB Board of Governors, is the first formal co-advisory framework between a multilateral development bank and international commercial banks, according to a press release from the ADB.
Under the agreement, the ADB and the eight banks can work together to provide independent advice to governments in developing Asia on how best to structure PPPs to make them attractive to the private sector and to manage the subsequent PPP bidding process.

The governments will, however, make the final choice of PPP winning bidders.

Bank of Tokyo-Mitsubishi UFJ and HSBC are among the major eight banks that signed the deal.
"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," said ADB Managing Director General Juan Miranda, who signed the agreement.
The ADB has estimated that developing Asia needs to spend USD 8 trillion between 2010 and 2020 on national infrastructure.

Many governments hope to raise finance for energy, roads, railways, ports, airports, water, and other key infrastructure through PPPs.
The multilateral development finance institution, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.

Established in 1966, it is owned by 67 members, mostly from the region, as well as the US, the UK and Germany.
In 2014, ADB assistance totaled USD 22.9 billion, including cofinancing of USD 9.2 billion. (end) mk.mt