How does ADB mobilize capital for private enterprise?
We produce financial solutions to manage the risks of investing in developing countries. Solutions may include a mixture of private and official funding sources. In providing assistance to the private sector, we use equity investments, loans, guarantees, or syndications including fronting (B loan or lender of record and guarantor of record) and non-funded risk participation arrangements to mobilize private investments. Equity may include subordinated loans, preferred stock, convertible loans, and other mezzanine financing. We generally provide or guarantee loans denominated in the major international currencies, but will increasingly use local currency financing in selected countries such as the Peoples Republic of China, India, Philippines, and Thailand. Our guarantees cover risks that the private sector cannot easily absorb or manage on its own. Reducing these risks can make a crucial difference to funding.
