The Asian Development Bank (ADB) and the Government of Japan have announced a US$16 billion partnership over the next 5 years, including the establishment of an investment fund.
Under this agreement, the partners aim to boost support for private infrastructure projects and promote public infrastructure development.
- First, in order to stimulate investment in quality and sustainable private infrastructure in Asia and the Pacific, including through public-private partnerships, ADB will establish a trust fund under the partnership with Japan by March 2016. The fund will be managed by ADB's Private Sector Operations Department and capitalized with US$1.5 billion in equity from the Japan International Cooperation Agency (JICA). Combined with ADB's own capital and that of commercial co-financing partners, the fund is expected to provide financing of at least US$6 billion and will enable ADB to expand large-scale private infrastructure operations by leveraging JICA's official development assistance resources and risk-bearing capacity.
- Second, in order to promote quality and sustainable public infrastructure development in the region, ADB and JICA will provide a total of US$10 billion ($5 billion each) in co-financing to sovereign borrowers over the 5 years. The two parties will collaborate to support long-term investment plans using ADB's Multi Tranche Financing Facility. They will also provide necessary technical assistance for preparing and implementing projects, leveraging the comparative advantages of each institution.
ADB and JICA will soon sign a Memorandum of Understanding on the partnership. ADB and the Government of Japan have agreed to hold regular high-level policy dialogues to effectively implement infrastructure investments under the partnership.
Developing quality, reliable, sustainable, and resilient infrastructure is one of the Sustainable Development Goals (SDGs) agreed at the UN summit in September. ADB will seek similar arrangements with other development partners to meet the SDGs, increase climate financing, support quality and sustainable infrastructure development, promote private sector development and operations, and address other development issues.