Overview of ADB Support for
Partnerships with Non-State Actors
Presentation for
ADB-UNICEF Regional Workshop on
The Role of Non-State Providers in Delivering Basic Social Services for Children
April 19, 2010
By Jon D. Lindborg, Southeast Asia Department
Outline
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Global Context for Partnerships
ADB Context for Partnerships
ADB Engagement with Non-State Actors
ADB and Public-Private Partnerships
Summing Up and Some Possible Discussion Points
Global Context: Proliferation of
Development Partnership Channels
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Over 60 bilateral donors (“legacy” and new players)
Over 230 international organizations
1000s of non-government (NGO), community (CBO), civil society
(CSO) and faith-based (FBO) organizations
Emergence of new players driving new approaches/innovation:
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Private Sector Corporate Social Responsibility (CSR) activities
Large Foundations:
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“Vertical Funds” focused on specific issues/themes:
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Bill and Melinda Gates Foundation ($33.5 billion endowment)
Global Fund for AIDS, TB and Malaria
Global Alliance for Vaccines and Immunization (GAVI)
Social Entrepreneurship Funds, e.g. Skoll Foundation and Acumen
Fund
U.S. Capital Flows to Developing World:
Non-Official Flows Matter More
Source: U.S. Agency for International Development (USAID)
Global Context: A Wide Range of PublicPrivate Relationships
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NGO and CBO partnerships
Corporate Social Responsibility activities
Formal or informal “alliances” such as USAID’s Global
Development Alliance (GDA)
Formal Public-Private Partnerships (PPPs) involving:
 Some contractual relationship between a
government and non-state actor to provide
infrastructure and/or services
 Risk-sharing between the partners
 Defined outputs and service delivery standards
PPPs: More than Steel and Concrete
From Economic Assets to…Social Services & Public Administration
Pre-1990s
1990s
2000-onward
Roads
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Power
- Health Care and Hospitals
- Water
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Ports
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Education and Schools
- Waste
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Research & Development
- Telecom
- Sports Complexes
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Rail
- Airports
- Vocational Training
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Tourism
Prisons
- Environmental-related
- ???
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Partnerships: Central to ADB Efforts to
Fighting Poverty in Asia and the Pacific
ADB “Strategy 2020” Context for
Partnerships
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ADB Strategy 2008-2020
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Three Development Agendas:
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Five Core Operational Areas:
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Inclusive Economic Growth
Environmentally Sustainable Growth
Regional Integration
Infrastructure
Environment, including Climate Change
Regional Cooperation and Integration
Financial Sector Development
Education
Scaling up private sector to generate growth and reduce
poverty: By 2020, 50% operations private sector-related
ADB “Strategy 2020” Context for
Partnerships
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Five Drivers of Change:
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Private Sector Development
Good Governance and Capacity Development
Gender Equity
Knowledge Solutions
Partnerships, including:
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Other donors & international development agencies
Private sector
NGOs, CBOs, Civil Society Organizations (CSOs)
CSOs Seen as Supporting Quality of ADB
Operations
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Add value to sustainable development by
introducing:
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ADB COOPERATION
WITH CIVIL SOCIETY
ANNUAL REPORT 2008
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Innovation
Accountability
Responsiveness
Participation
Sustainability
Role of ADB’s NGO and Civil Society
Center (NGOC)
See http://www.adb.org/ngos/ngocenter.asp#1st for more information
ADB Has a Mandate for Increasing Engagement
with Civil Society
Public-Private Partnerships (PPPs) in SE Asia
Region: More Hype than Reality?
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Expectations very high
Since 1988 about 330 projects in
Southeast Asia with varying
degrees of success:
– Unsolicited proposals, e.g.
Indonesia power/roads in 1990s
– Philippines experience with N.
Luzon Expressway; water sector
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Bottom line: An uneven track
record and even some skepticism
No. of PPP Projects in Selected SE Asia Countries
(Financial Closure 1998-2008)
250
200
Vietnam
Thailand
Philippines
Malaysia
Lao PDR
Indonesia
Cambodia
150
100
50
0
Power Roads
Source: World Bank PPI Database
Ports
Rails
Water
PPPs in Southeast Asia – State of Play
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PPP pipelines are weak
International infrastructure-financing banks have been severely
constrained, some signs of improvement
Limited lending capacity of local banks to fill gap brought by decline of
external financing
Investors remain interested…but need committed governments
Status
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Vietnam: IPPs, roads, PPP policy & unit
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Indonesia: more fiscal space, ‘crash’ electricity generation program, overall PPP
framework
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Philippines: continued privatization of power assets, ???
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Laos & Cambodia: hydropower
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Greater Mekong Region power trade: Thailand, Cambodia, Laos and Vietnam
Source: ADB Special Evaluation Study on PPP, September 2009
The “Political Economy” of PPP:
Need to Recognize Lingering Perception Challenges
ADB Approach to Mainstreaming PPPs:
- Regional Departments, e.g. Southeast Asia Department (SERD)
- Regional and Sustainable Development Department (RSDD)
- Private Sector Operations Department (PSOD)
Capacity Development
Project Development
Financing
Policy, legal and regulatory
guidelines
Project Development
Facility
Sovereign
Institutional development
Pre-feasibility studies
Non-sovereign
Building stakeholder
support/understanding
Developing pipeline of
bankable projects
Equity and debt
Dedicated PPP units
Tendering processes
Political risk guarantees
TA and training
Pilot PPP transactions
Partial credit guarantees
Project monitoring
Co-financing
TA and training
Local currency
Infrastructure funds
ADB also supports complementary reforms in
infrastructure and financial sectors
ADB Projects with PPP-Related Support
1998-2008
Public Sector Loans
Private Sector Operations
Region
No. of
Projects
Amount
($M)
Region
No. of
Projects
Total
($M)
Central and
West Asia
32
3,710
Central and
West Asia
6
325
East Asia
34
6,096
East Asia
6
380
Pacific
3
33
Pacific
0
0
South Asia
53
8,145
South Asia
15
1,556
Southeast
Asia
16
2,626
Southeast
Asia
10
739
TOTAL
138
20,610
TOTAL
37
2,999
Source: ADB Review of ADB Assistance for PPP in
Infrastructure Development, August 2009
ADB Experience with Infrastructure
PPPs….Key Lessons from Special
Evaluation Study
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Sustained political will and champions key to success
Not universal solution or panacea
Need to address policy and sector investment reforms
Development of institutional, legal and regulatory frameworks
Specialized PPP unit support services as generally useful
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Building a realistic project pipeline of bankable projects
Feasibility studies
Project preparation
Tendering and negotiations
Critical role of highly specialized technical/finance/legal experts
Need long-term engagement
Source: ADB Special Evaluation Study on PPP, September 2009
Summing Up and Some Possible
Discussion Points
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Substantial regional/global experience in provision of
infrastructure through PPPs, including water/sanitation
Social sector PPPs as more challenging
Cannot ignore the “political economy” of PPP: citizens are
more likely to tolerate low quality under public management
than under a PPP
Importance of robust project development support to make
projects “bankable”
Need to be careful not to “oversell” benefits of PPP without
effective public sector capacity development and
accountability mechanisms
Thank You