In his closing address at the 52nd annual meeting on Saturday, Nakao said the private sector operations would account for one-third of ADB’s total projects by number by 2024.
“We discussed the importance of expanding to frontier economies and social sectors such as health and education,” he said.
He stressed the need to more closely look at risk and pricing, as well as the real impact on development.
“We are expanding staff resources for private sector operations and risk management, and will increase outposting to resident missions,” he said.
Nakao said an office would be opened in Singapore by the end of this year to facilitate engagement with private sponsors and financiers.
According to Nakao, there was a discussion on the value of equity investment in addition to loan operations, and governors from ADB member countries also supported the greater use of credit enhancement instruments.
Last year, the bank’s new lending, equity investments, and guarantees to private companies amounted to US$3.1 billion (Bt99 billion), a 37-per-cent increase from 2017. On top of that, ADB secured commercial co-financing of $7.2 billion.
“We will continue to expand our private sector operations. We will also target a substantial increase in commercial cofinancing,” he said.
He aimed to achieve the target of every $1 financing from ADB for private sector operations being matched by $2.5 of long-term cofinancing. The governors encouraged the lender to help make projects bankable.
“We will make greater use of risk management products to help projects become bankable,” he said.
“Our private sector operations will widen geographic coverage by entering into new markets. We will also broaden our business reach to support social sectors, namely, education and health, as well as agribusiness companies.”
Nakao offered as examples Papua New Guinea and Timor-Leste, where ADB is providing loans to agribusiness companies to improve the agricultural value chain. The lender recently approved a $100-million Pacific renewable energy programme, which includes credit enhancement for private sector investments in renewable energy in the Pacific.
To improve its Strategy 2030, ADB is working on operational plans in seven priority areas, and action plans for private sector operations and knowledge management. Gender equality and tackling climate change are among the key priorities, he said.
With the target that at least 75 per cent of the number of ADB’s operations will promote gender equality and support climate actions by 2030, the lender will encourage private companies to include gender elements.
Focus on ocean health
During the meeting, the action plan for healthy oceans and sustainable blue economies was launched, ensuring the expansion of financing and technical assistance for projects in this context to $5 billion in the next five years.
“Our oceans are in danger due to increasing water temperatures, untreated wastewater and plastic pollution, and unsustainable fishing practices. Governors stressed the need to pay greater attention to ocean health for the future of the planet, as well as lives and livelihoods of the people,” he said.
Nakao pledged that the ADB would cooperate with regional initiatives by member countries, incorporating advanced technologies, innovation, and new ideas in its projects.
“We should continue to monitor the outcomes through a strong corporate results framework and evaluation,” he said.
At the annual gathering, Nakao repeatedly stressed the importance of sustainable tourism as a key driver of regional growth.
“Tourism is becoming an important contributor to gross domestic product and jobs. An increasing number of Asian people are enjoying tourism. To make tourism sustainable, we must protect the environment, cultural heritage, and communities through appropriate policies and regulations,” he said.
Last year, nearly 350 million international tourists arrived in Asia and Pacific countries, and this number has more than doubled since 2005.
“This region has some of the world’s most beautiful natural landscapes and unique cultural monuments,” he said.
“As tourism continues to expand rapidly, it will be important to pursue sustainable tourism that protects the environment such as forests and coral reefs, preserves local cultures, and benefits local communities.”
According to Nakao, the lender supports sustainable tourism through infrastructure investments, policy reforms, and institutional development. He underscored the importance of attracting good talents to ensure the success of its operations.
“We will promote staff mobility between departments, introduce flexible work arrangements, and continue to strengthen training for managers and staff,” he said.
To improve staff diversity and gender balance, the ratio of female international staff at ADB has increased to 36 per cent, approaching the target of 40 per cent.
“We need a stronger staff base for implementing Strategy 2030. We will continue to recruit fresh talent,” he said.
Published : May 05, 2019
By : KHINE KYAW THE NATION NADI, FIJI