Diapositive 1

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AFRICAN DEVELOPMENT BANK GROUP
AU-EU WORKSHOP ON RESOURCES FOR THE JOINT AU-EU
STRATEGY (JAES) FIRST ACTION PLAN ADBS
FINANCING INSTRUMENTS
ADDIS ABABA
LAMIN MANNEH ANTHONY NYONG www.afdb.org
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OUTLINE
AFRICAN DEVELOPMENT BANK GROUP

• 1. Traditional Funding instruments
• 2. Special Funds
• 3. Ad Hoc Special Funds
• 4. Trust Funds
• 5. Conclusion

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INTRODUCTION
AFRICAN DEVELOPMENT BANK GROUP

• ADB is lead financial institution in Africa and
  Plays a triple role
• Catalytic Financier
• Strategic Partner
• Knowledge Broker
• ADB is catalytic financier but still a bank
• Therefore complies with Banking principles
• Ensures its sustainability credibility
• Safeguards its triple A rating
• Bankable projects/programmes - Selectivity

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• 1. Traditional Funding instruments
• The Banks traditional financing hinges on
• Project and programme financing
• Budget support
• Financing essentially country based (Country
  Strategy Papers - CSPs)
• Now Upscaling regional operations

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• The Banks traditional financing uses 2 key
  windows
• ADF window
• concessional window
• lending to poorer African countries and
• ADB window
• nonconcessional window
• lending to MICs at market rate

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• 1. ADF window
• concessional window
• replenished every 3 years
• performance based country allocations
• Current ADF-XI - 8.7 billion
• Infrastructure-financing stepped up
• Likewise 17.5 to regional operations
• Contribution regional ops buy in

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• ADB window
• nonconcessional window
• lending to MICs at market rate
• Eligible countries essentially, North African
  countries and Southern African countries
• Annual average disbursement of about US 3 billion

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• Private Sector Lending
• lending to eligible private sector companies
  capital and governance structures,
  regulatory/legislative protection
• Direct lending or equity participation
• 2008 US 1.2 billion
• 2009 target is US 2 billion
• Partnership with certain regional IFIs
• Developing PPPs

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• 1. Regional Operations Financing Challenges
• Granting of loans to countries or regional
• organizations/institutions
• Mixed neighbourhoods blending
• Sequencing, based on prioritization resource
• availability
• Alignment and co-ordination of regional, country
• and sector strategies
• Enhance implementation by fostering strategic
• partnerships with other ROs and donors

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• 2. Special Funds and Facilities
• NEPAD Infrastructure Project Preparation
  Facility NEPAD IPPF
• African Water Facility (AWF) (33 million -2009)
• Fragile States Facility (ex PCCF)
• Middle-Income Countries Facility (MICF)
• Congo Basin Forest Fund
• Infrastructure Consortium for Africa (ICA)
• ClimDev
• Special Fund for Reconstruction Devt. GLR

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• Special Funds Facilities NEPAD IPPF
• Set up 2004 - seed-funded by Canada
• Now a multi-donor facility currently US 24 m
• Purpose mobilization technical financial res.
• identification and upstream preparation of
  regional infrastructure projects, for funding by
  Bank or other financiers, to address both supply
  demand side constraints
• Capacity building - to formulate bankable
  infrastruc. devt projects programs - attract
  public private investments.

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• Special Funds Facilities FSF
• Transformation of PCCF into FSF, UA 574.07
  million an ADF-XI allocation UA 408 million
  PCCF carry-over of UA165.64 million.
• Autonomous entity with three grant support
  windows
• Supplemental Support Window scaled up Bank
  support engaging eligible fragile states
• Arrears Clearance Window assist in arrears
  clearance of eligible states to gain access to
  HIPC MDRI and
• Targeted Support Window supplemental targeted
  support CB KM

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• 3. Ad Hoc Special Funds and Facilities
• Emergency Liquidity Facility (ELF) US1.5 billion
  (limits 150 50 m)
• Trade Finance Initiative (TFI) US1 billion (Tr.
  Fin. banks instits)
• African Food Crisis Response UA 497 million
  (US 650 million) UA 20 million budget support
• Fertilizer Facility

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• Emergency Liquidity Facility (ELF)
• Established in March 2009 in wake of unfolding
  financial crisis
• US 1.5 billion package
• Short-term unexpected funding needs resulting
  from financial crisis
• Eligible countries, public/private IFIs and
  projects (sovereign non sov. In ADB countries
• non-sov. In ADF countries) subject to
  debt-carrying capacity
• Lending ceilings 150m/country 50m IFI/project

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• Trade Finance Initiative (TFI)
• Like ELF established in March 2009 in response
  to financial crisis credit squeeze, hike in
  cost etc.
• US1 billion as LOC to Trade financing banks,
  DFI similar institutions
• Standard selection criteria apply strategic
  alignment, commercial viability, devt. outcomes,
  complementarity, additionality etc
• Meet Banks credit rating standard (risk rating 6
  or better

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• 4. Trust Funds
• Various types of bi- and multilateral trust
  funds managed by Bank Group
• Used to fund studies, consultancies,
  partnerships and components of some
  projects/programmes

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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP
5. CONCLUSION ADB Catalytic Financier -
Strategic Partner - Knowledge Broker
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THE ADBS FINANCING INSTRUMENTS
AFRICAN DEVELOPMENT BANK GROUP

• STAP Today Preliminary Results of the 2006
  Review 205 Projects
• 62 facilitation projects (52 in 2002)
• 17 capacity building projects (18 in 2002)
• 62 study projects (18 in 2002)
• 64 investment projects (36 in 2002)
• Sector distribution
• 54 in the energy sector
• 35 in the water sector
• 99 in the transport sector
• 16 in the ITC sector
• 1 multisector project

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SOME PROJECTS IMPLEMENTED UNDER STAP
AFRICAN DEVELOPMENT BANK GROUP

• 14 projects have been completed
• 79 projects are under implementation
• ADB Group funded 37 Infrastructure Projects
• and Programs (2002-2007) for a total
  commitment
• value of US 1.34 billion
• Co-financing mobilised more than US 1.6
  billion

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SOME STAP PROJECTS AND DISTRIBUTION
AFRICAN DEVELOPMENT BANK GROUP
TELECOMMUNICATION SAT 3, RASCOM, EASSy,
ENERGY Power Interconnections, African Gas
Pipeline, TRANSPORT Transport and Road Transit
Facilitation Programs (e.g. Dakar-Bamako
Accra-Ouagadougou- Bamako axis, Kenya-
Ethiopia (Isiolo-Moyale segment,
Arusha-NamangaAthi River Road, etc)