Uxolo Global 2023: Looking back on a year of landmarks with ADB
ADB had another successful year in 2022, signing off on several financial firsts for the multilateral. Uxolo outlines some of the landmark deals of 2022, and hears from ADB investment specialist Aditi Bhattacharya on what 2023 has in store.
The MDB hit the ground running in 2022 with its largest ever infrastructure financing in the Asia-Pacific region – the South Commuter railway project. The $4.3 billion project backs the construction of nearly 55 kilometres of modern suburban railway line connecting Metro Manila with the city of Calamba in the Philippines.
Infrastructure underspending in the Philippines presented itself as a massive financial opportunity for ADB’s big-ticket investment and also provided ample space for achieving large-scale impact, for example - by increasing the footfall for the North–South Commuter Railway (NSCR) network to more than 600,000 passengers per day by 2040. The construction activities, co-financed by JICA, aim to create temporary employment for more than 35,500 people, and the operation of the project railways is estimated to provide employment to more than 3,200 people.
Markus Roesner, principal transport specialist at ADB highlighted to Uxolo that “the benefit of reduced travel times, increased social mobility, and safety - factors that facilitate getting out of income poverty - will benefit women in particular by providing better access to jobs and education.”
As part of Uxolo’s ‘Under the Radar’ series, which highlights DFI-backed deals that rarely grab the headlines, ADB was once again spotlighted for its commitment to SDG 5: gender equality. The locally denominated $68 million loan for affordable green housing for lower-income women borrowers in India was signed in collaboration with IIFL Home Finance Limited (IIFL). The funding comprised a direct ADB loan of up to $58 million and a $10 million concessional loan by the Canadian Climate Fund for the Private Sector in Asia (CFPS). From ADB’s loan, 80% is earmarked for lending to women borrowers or co-borrowers, and 20% is allocated to financing mortgages for green-certified homes. Meanwhile, the CFPS loan will support IIFL’s green housing portfolio, specifically incentivising developers to adopt green certification standards in building affordable housing.
Later in the year, ADB made a splash at both COP27 and the G20 in Indonesia, with the bank’s Energy Transition Mechanism (ETM) making landmark progress. Launched at the COP26 summit, the scheme builds on a concept developed by Prudential and supported by Citi and HSBC, and involves impact-motivated investors buying coal-fired capacity from generators and utilities and the sellers using the proceeds to invest in renewables and the buyers promising to retire the coal capacity early.
At the G20, ADB announced the signing of an MoU with Cirebon Electric Power and other partners to explore the early retirement of the 660MW Cirebon1 plant in West Java – the first coal-fired power plant under the ETM programme. The project marks a landmark refinancing within the energy transition, and is expected to cost $250-$300 million and reduce the plant’s life by 10-15 years.
ADB completed the year with the win of Uxolo’s Development Deal of the Year with the Ninh Thuan Wind project in Vietnam. The 88MW project displayed an example of a robust and truly blended finance transaction, with ADB providing $25 million, JICA $25 million, and local and international commercial lenders the remaining $57 million. The privately-funded philanthropic Climate Innovation and Development Fund also provided a $5 million grant which de-risked some of the construction for the sponsors and ADB.
As the bank continues to make headway in 2023, ADB investment specialist Aditi Bhattacharya sat down with Uxolo at its annual global conference in Lisbon to offer a glimpse of what’s already been done in 2023 and what more is to come.