There has been a significant clamor across multilateral development banks in “unlocking”, “catalyzing” and “mobilizing” private sector resources for development. In the case of ADB, this is embedded in its Strategy 2030 with a target that the bank will expand its private sector operations to reach one – third of its total operations in number by 2024. Emphasis is given on profitability, commercial sustainability and expansion in so – called new and frontier markets in the fragile, conflict and small island developing states. Financing modalities such as private equity funds to scale up public – private partnerships is one of the proposed mechanisms in mobilizing financial resources for development. Some of these projects are categorized as financial intermediary (FIs) or third party lending with limited ADB supervision. The shifts and changes in these new lending modalities have led to a more diverse portfolio which also poses more complex social and environmental risks and harm.
Lack of information disclosure, accountability, meaningful consultation and risky sub – projects without adequate MDB oversight are some of the issues being raised by CSOs. As compared to the traditional lending modalities, there are a lot of unknown variables when dealing with financial intermediation. The World Bank’s private sector arm, the International Finance Corporation invests over half of its total portfolio in FIs. Inclusive Development International (IDI) and partners uncovered more than 150 projects and companies funded by IFC intermediaries that are causing or are likely to cause serious environmental harms and human rights violations. There are valuable lessons that can be replicated from over a decade of campaigning by CSOs on financial intermediation on IFC and other MDBs to ADB.
Objectives of the proposed ADB FI learning session:
For social, economic, gender, environmental and climate justice advocates concerned about MDBs particularly ADB's opaque FI portfolio.
To learn more on FI lending at ADB and other MDBs in terms of what worked and did not work.
To serve as an initial platform to discuss broader ADB FI campaign building.
In order to better facilitate the preparation for the proposed ADB FI learning session, NGO Forum on ADB, together with Recourse, Inclusive Development International (IDI), and Building and Wood Workers' International (BWI) is conducting this 3 – minute questionnaire, to participate click the button below -