The Asian Development Bank (ADB) will beef up its private sector operations over the next five years, pinning more trust on corporations after its combined investments in the private sector peaked at $4.75 billion in 2013.
“The growth in private sector operations is consistent with our belief that the private sector is vital to the development of inclusive and environmentally sustainable growth throughout Asia,” Todd Freeland, Director General of ADB’s Private Sector Operations Department (PSOD), said in a statement.
“We expect to continue to expand our private sector operations significantly over the next five years in support of this objective,” he further said.
A latest performance report showed on Tuesday that ADB’s private sector operations performed strongly in the previous year, with better project success rates and more than $4.75 billion of cumulative investments in sectors including clean energy, agriculture, and health.
“The results show that our private sector operations are making a significant contribution to ADB’s overall financial and developmental goals,” Freeland said.
ADB approved a record number of private sector transactions in 2013, expanding its investment activities in core industry sectors such as renewable energy, clean water, and financial services, while continuing to grow its operations in newer markets such as the health and agribusiness sectors.
Specifically, PSOD’s investment portfolio now stood at $6.2 billion, more than double the level prior to the financial crisis of 2007-2008.
The 2013 Development Effectiveness Report for PSOD also indicated that the success rate for completed private sector transactions over the three-year period from 2011 to 2013, which rose to 67 percent from 53 percent in the 2010 to 2012 period.
For instance, over 4,600 megawatts of new energy generation capacity was added; over 70,000 households received new or improved water supply; and over 13,000 jobs were created from investment and financing activities made by ADB last year.
In addition, over 1,100 SMEs benefitted from ADB support through targeted lending programs to local banks.
“SMEs are major income and job providers across most developing economies in the region, and can play a major role in inclusive growth,” ADB said in a statement.