The Asian Development Bank (ADB) and the Japanese government have announced a five-year partnership that will see them invest up to $16 billion in infrastructure across the region, according to an ADB statement.
The pool of money will be channelled to private projects via two distinct structures. A trust fund, to be set up by March 2016, is expected to provide financing of at least $6 billion. The fund will be managed by ADB’s private sector operations department and seeded with $1.5 billion in equity from the Japan International Cooperation Agency (JICA), the country’s development agency.
It will be combined with ADB’s own capital and that of commercial co-financing partners.
ADB and JICA will also contribute $5 billion to a co-financing facility targeting sovereign borrowers over the five years. With the use of ADB’s Multi-Tranche Financing Facility, the two parties will support long-term investment plans, they said in the statement.
ADB and the Japanese government have agreed to hold regular high-level policy dialogues to implement infrastructure investments. A Memorandum of Understanding will be signed soon.
“Through its [ADB’s] assistance for urban transport, renewable energy, and other infrastructure, the partnership will also contribute to the expansion of climate financing to developing countries, in line with the expected outcome of the COP21 meeting in December,” said Takehiko Nakao, ADB’s president.
ADB will seek similar arrangements with other development partners to meet the Sustainable Development Goals (SDGs) agreed at the UN Summit in September, support quality infrastructure development and promote private sector development and operations.
In 2014, ADB invested a total of $22.9 billion, including co-financing of $9.2 billion.