50 YEARS OF ADB: IMPROVING

LIVES FOR A BETTER FUTURE

ASIAN DEVELOPMENT BANK 2016 ANNUAL REPORT

CONTENTS

CHAPTER 1 CHAPTER 2 CHAPTER 3 CHAPTER 4

8 16 36 42

2 PRESIDENT’S MESSAGE 4 BOARD OF DIRECTORS 6 FINANCIAL HIGHLIGHTS CHAPTER 1 8 Improving Lives for a Better Future CHAPTER 2 16 Central and West Asia 20 East Asia 24 Pacific 28 South Asia 32 Southeast Asia CHAPTER 3 36 Developing the Private Sector CHAPTER 4 42 Delivering an Effective Organization SPECIAL APPENDIX 49 Impact of the ADF–OCR Merger and ADB’s Financial Statements

ANNUAL REPORT 2016 USB CONTENTS FINANCIAL REPORT OPERATIONAL DATA ORGANIZATIONAL INFORMATION ADB MEMBER FACT SHEETS Population ‡.ˆ‰ B 2015 We connected „. † B 3 million 1966 new households to electricity (2010–2016)

GDP per capita A CHANGING Š‹,Œ†Ž TOGETHER We provided 2015 REGION 8.4 million WE DELIVER households with Šˆ‘ Since ADB’s founding in 1966, Asia 1966 new and improved has transformed from the world’s Asia has changed a lot in the past water supplies poorest region to a dynamic center 50 years. So has ADB. We have (2010–2016) of global growth and home to more evolved to meet the changing than half the world’s people. demands of the region, to ensure Poverty (less than $1.90 a day) we continue to produce results that improve people’s lives. „.‡ˆ B 1990 We built and upgraded
‰.‡‡ B 92,000 2015 kilometers of roads (2010–2016)

ASSISTANCE IN PRC’s Shanghai’s Pudong area A BANK FOR booms after the opening of ADVERSITY ADB-supported $267 million HALF THE In the midst of the 1997-1998 Shanghai Yangpu Bridge. From economic shocks to natural Asian financial crisis, ADB WORLD disasters, the region has su‡ered provides $7.8 billion to the three

many setbacks. ADB provides hardest-hit economies of ADB has provided more than emergency funds and advice to Indonesia, the Republic of $267 billion in assistance to the Korea, and Thailand. region since its first loan help its members through More than 2 million, mostly poor, to Thailand in 1968. Our projects challenging times. people in India benefit from 2,000 km of ADB-funded rural roads. fuel economic growth and reduce poverty. After Typhoon Yolanda (Haiyan) devastates the Philippines in 2013, ADB provides $900 million for immediate and long-term relief.

. B ADB is an international development finance institution. Our goal is to reduce poverty TOTAL OPERATIONS and promote sustainable economic growth in Asia and the Pacific. We provide loans, ’s grants, equity investments, and guarantees to our developing member countries. We WHO WE ARE supplement our financial support with development knowledge and policy advice. RECORD RESULTS . B  M . B LOAN AND GRANT TECHNICAL ASSISTANCE COFINANCING
APPROVALS 50 YEARS OF ADB: IMPROVING LIVES FOR A BETTER FUTURE

ASIAN DEVELOPMENT BANK 2016 ANNUAL REPORT PRESIDENT’S MESSAGE

The Asian Development century later, the region’s economic growth and success Bank (ADB) was created in reducing poverty have exceeded even the most 50 years ago through the optimistic forecasts. collective wishes and collaborative efforts of But we cannot be complacent. The fact remains that governments across Asia there are still 330 million people living in absolute poverty and the Pacific, and from across Asia and the Pacific. A lack of infrastructure other countries around continues to limit economic growth, inhibit poverty the world. The Bank’s reduction, and restrict improvements to quality of life. purpose was clear from Implementing the Sustainable Development Goals and the beginning: to foster the climate change actions agreed at the 21st Conference economic growth and of Parties on Climate Change are also priorities for our regional cooperation. region. The private sector needs to be further developed. Because ADB’s founders wanted our organization to be Gender equality needs strengthening at every level. The truly multilateral, they encouraged developed nations in challenges of urbanization, aging, and public health must North America and Europe to become members. Held on be addressed. 19 December 1966 in Manila, ADB’s opening ceremony This 50th edition of the ADB annual report provides celebrated the union of 31 members, with 19 from Asia a fascinating insight into the history of the region and and the Pacific and 12 from other continents. Today, our ADB’s contribution to it. The report gives a strong membership has more than doubled to 67, including 48 account of where ADB now stands as an institution, and members from Asia and the Pacific. I’m pleased with our progress. In the mid-1960s, food was in short supply across The combination of Asian Development Fund (ADF) poverty-stricken Asia and the region lacked access to lending operations and ordinary capital resources (OCR) development finance. ADB’s focus therefore was on took effect on 1 January 2017. OCR equity almost tripled, technical assistance and loans to agriculture. Half a from $17.3 billion to $48.1 billion, as $30.8 billion of ADF

2 ADB AR 2016 loans and other assets were transferred from the ADF. Assets amounting to $2.5 billion remained in the ADF to support its grant operations. The newly enlarged OCR window will offer the poorer borrowing countries concessional lending on the same terms and conditions as before, while the ADF itself will provide only grant assistance going forward. This reform is expected to raise ADB annual loan and grant approvals by a targeted 50%—from $13.5 billion in 2014 to $20 billion in 2020 (see Special Appendix). The effects of the combination became evident even before it became effective. In 2016, ADB approved loans and grants to our developing member countries totaling a record $17.47 billion, compared to $15.99 billion in 2015. Disbursements also scaled new heights, rising to $12.26 billion. Our private sector operations amounted to more than $2.5 billion for the second year running. On the back of strong partnerships with various development stakeholders, we also mobilized cofinancing worth $14.06 billion— another record. These results pushed our total operations for 2016 to $31.70 billion, the highest in ADB history. In May 2016, we also completed a strong replenishment of the ADF 12 for the period 2017–2020. The contributions from our donors will enable a doubling of the minimum allocation for small countries, strengthened support for disaster risk management, and enhanced regional health security. The increase in our development financing to Asia and the Pacific reflects our strong commitment to improving the lives of the region’s people. As ADB celebrates 50 years of providing As ADB celebrates development assistance, we will strive even harder to meet the 50 years ... , we will changing needs of our developing member countries. In the next 50 years, we should strengthen work in three broad areas of strive even harder to achievement: providing a combination of finance and knowledge for developing countries, promoting good policies, and expanding meet the changing programs of regional cooperation. needs of our developing member countries.

Takehiko Nakao President and Chairman of the Board of Directors

MANAGEMENT TEAM

Left to right: Vice-Presidents Stephen P. Groff, Wencai Zhang, Bambang Susantono, Diwakar Gupta, Deborah Stokes, Ingrid van Wees; Managing Director General Juan Miranda; The Secretary Woochong Um.

3 BOARD OF DIRECTORS

Front, left to right: The Board of Directors provides strategic wider currency choices for recipients of Directors Paul direction to ADB; approves policies, loans, concessional loans. Dominguez, Mathew and grants; and ensures that shareholder Fox, Koichi Hasegawa, guidance is implemented. In 2016, the Board The Board approved changes to ADB’s main Won-Mok Choi, held 43 formal meetings and 49 informal crisis lending instrument, the Countercyclical Maurizio Ghirga, Support Facility. The move refined the facility’s Zhongjing Wang, sessions. It approved $17.64 billion in loans, President and grants, equity investments, guarantees, and access criteria, while strengthening Board Chairman of the technical assistance projects. It endorsed new consultation, enhancing coordination with Board of Directors country partnership strategies for Bangladesh, other multilateral organizations, and clarifying Takehiko Nakao, the People’s Republic of China, Indonesia, the difference between crisis lending and Directors Bhimantara Tajikistan, Timor-Leste, and Viet Nam. It also policy-based lending. The Board supported the Widyajala, David endorsed the Pacific Approach 2016–2020, a revision of the concessional assistance policy, Murchison, Philaslak which consolidated the performance-based Yukkasemwong, strategic framework that serves as the overall Swati Dandekar, country partnership strategy for the 11 smallest allocation policy and the ADF grant framework. Kshatrapati Shivaji. Pacific island countries. To complete the alignment of policies with the ADF-OCR merger, ADB reviewed its Back, left to right: investment strategy and authority, broadening Alternate Directors MAJOR POLICY INITIATIVES its scope to include reputable international Muhammad Sami In 2015, to make more development assistance credit rating agencies and consider socially Saeed, Scott Dawson, available to countries most in need, the responsible investing. Masashi Tanabe, Board of Directors endorsed the proposal to Johannes Schneider, merge the lending operations of the Asian The Board provided guidance in the ongoing Wenxing Pan, Mario Di Development Fund (ADF) with ADB’s review of ADB’s capital adequacy framework Maio, Joar Strand, and proposed reforms to strengthen the staff Philip Rose, Rokiah Hj ordinary capital resources (OCR). To prepare Badar, Michael Strauss, for this merger, the Board in 2016 approved retirement plan. It approved revisions to ADB’s Sharafjon Sheraliev. amendments to financial policies on ADF Anticorruption Policy, particularly to promote grant operations and OCR operations. The tax integrity and reduce tax avoidance. The revised policy provides increased support for Not in photo: amendments to the OCR financial policies Director Mario Sander sought to optimize the financial management developing member countries (DMCs) to of the consolidated balance sheet and provide mobilize domestic resources, and encourages

4 ADB AR 2016 the inclusion of tax integrity issues in ADB policy in dialogue with ADB partners about Pacific regional dialogue with DMCs, especially when developing programming, technical and vocational education and country partnership strategies. training initiatives, future partnerships, and cofinancing opportunities. During informal sessions, the Board also considered organizational resilience, local currency funding of To fully appreciate the development needs of the region, ADB loans, procurement reforms, the operational plan small groups of Board members undertake group visits on regional cooperation and integration, and updates to selected DMCs. These visits allow Board members to the review of the ADB Trade Finance Program. to observe ADB operations and engage in dialogue with government officials, bilateral and multilateral aid agencies, civil society organizations, private sector COMMITTEES OF THE BOARD partners, and project beneficiaries. In 2016, six committees supported the Board: Audit, Budget Review, Compliance Review, Development In March, Board members visited Timor-Leste and Effectiveness, Ethics, and Human Resources. held high-level discussions with various stakeholders regarding the country’s prospects for economic The Audit Committee reviewed and discussed updates diversification. The group also discussed ADB support on business continuity, disaster risk management, and for transport infrastructure, human capital investment, anticorruption and integrity. The Compliance Review and municipal services. In June, Board members visited Committee noted the implementation of remedial Georgia and Armenia. They witnessed ADB’s role actions on three cases filed before the Compliance in improving roads, basic urban services, renewable Review Panel. In 2016, the Human Resources Committee energy, the sustainability of infrastructure investments, discussed the implementation of reforms in recruiting and disaster resilience in the two countries. In late and optimizing staff, managing positions, developing October and early November, Board members visited leaders, and promoting diversity and inclusion in the Tonga and Nauru to see first-hand ADB projects for workplace. The committee also discussed ADB staff climate-proofing school buildings and power lines, pension and medical plans. establishing broadband connectivity, and supporting port development. The Budget Review Committee held extensive budget consultations in light of the scaling up of operations during the first year of the ADF-OCR merger in 2017. It also considered budgetary priorities for organizational resilience and information technology reform. The Development Effectiveness Committee reviewed independent evaluations on ADB’s partnerships, environmentally sustainable growth, private sector operations, engagement with middle-income countries, safeguard implementation in selected countries, and country operations in Sri Lanka.

PARTNERSHIP AND KNOWLEDGE EXCHANGE The Board puts a premium on exchanging knowledge with ADB members and other development partners. BOARD VISITS NAURU When ADB governors, alternate governors, and other In November, a small group of ADB directors eminent persons visit the ADB headquarters, the Board visited Nauru to congratulate the government on the establishment of its sovereign wealth may convene an informal forum to discuss global and fund, an initiative that was supported by ADB regional developments that might influence ADB technical assistance. Meeting with the President operations. of Nauru, Baron Waqa (pictured, center), the country’s minister of finance, and representatives During 2016, the Board hosted informal sessions with, of other development partners, participating among others, the secretary general of the Pacific Islands Board members gained a better appreciation of Forum Secretariat, the ADB governor for Germany, the unique development challenges faced by and the presidents of the New Development Bank microstates such as Nauru. and the Asian Infrastructure Investment Bank. These sessions provided opportunities for the Board to engage

5 FINANCIAL HIGHLIGHTS

2016 APPROVALS ADB Approvals, 2012–2016, and Commitments, 2016 Approvals 2016 ($ million) 2012a 2013a 2014a 2015a Approvals Commitmentsb Loans, Grants, and Others By Source $17.47 B Ordinary Capital Resources 9,632 10,192 10,342 13,113 14,389 11,015 LOANS, GRANTS, AND OTHERS Loans 9,373 10,015 10,137 12,638 13,797 c, d 10,708c, d Guarantees 128 35 20 341 515 212 Equity Investments 131 142 185e 134 77 96 Asian Development Fund 2,846 3,850 3,091 2,867 3,073 2,284 Loans 2,180 3,008 2,686 2,514 2,556c 1,803c $169 M Grants 666 843 405 353 518 481 TECHNICAL ASSISTANCE Special Fundsf 4 7 0 7 9 9 Grants 4 7 0 7 9 9 Subtotal 12,482 14,048 13,433 15,987 17,471 13,309 By Operations Sovereign 11,127 12,589 11,571 13,362 14,970 11,515 $14.06 B Loans 10,457 11,740 11,166 13,001 13,943c 11,024c COFINANCING INCLUDING Guarantees - - - - 500 - TRUST FUNDS Grants 670 849 405 360 527 491 Nonsovereign 1,355 1,459 1,862 2,626 2,502 1,794 Loans 1,096 1,282 1,657 2,150 2,410d 1,486d Guarantees 128 35 20 341 15 212 Equity Investments 131 142 185e 134 77 96 Subtotal 12,482 14,048 13,433 15,987 17,471 13,309 2016 COMMITMENTS Technical Assistance Sovereign 146 149 148 136 162 170 Nonsovereign 5 6 11 5 7 11 Subtotal 151 155 158 141 169 180 Cofinancing Including Trust Funds $13.31 B Sovereign 2,155 3,714 4,216 6,142 8,225 7,449 LOANS, GRANTS, AND OTHERS Trust Funds Administered by ADB 206 299 147 205 402 399 Bilateral 944 1,753 902 2,232 3,263 3,487 Multilateral 939 1,655 2,733 3,492 4,250 3,480 Othersg 65 6 434 213 311 83 Nonsovereignh 6,117 2,933 5,006 4,593 5,836 5,653 $180 M Subtotal 8,272 6,647 9,222 10,735 14,061 13,102 TECHNICAL ASSISTANCE TOTAL 20,905 20,850 22,813 26,863 31,701 26,591 - = nil, 0 = less than $500,000. Note: Numbers may not sum precisely because of rounding. a Excludes terminated loans, grants, equities, guarantees, and technical assistance. b Commitment is the financing approved by ADB’s Board of Directors or Management for which the investment agreement has been signed by the borrower, recipient, or the investee company and ADB. It is the amount indicated in the investment agreement that $13.10 B may or may not be equal to the approved amount depending on the exchange rate at the time of signing. In the case of official and commercial cofinancing not administered by ADB for which the signed amount is not readily available, the approved amount is used. COFINANCING INCLUDING c Includes five project design advances approved in February, June, September, November, and December 2016 in amounts ranging TRUST FUNDS from $2 million to $10 million. d Includes $225 million classified as debt securities in financial statements in accordance with accounting standards. e Includes $10 million classified as debt securities in financial statements in accordance with accounting standards. f Special funds other than the Asian Development Fund, such as the Asia Pacific Disaster Response Fund and the Climate Change Fund. g “Others” includes private sector cofinancing through foundations and corporate social responsibility programs, and any public source, such as national development banks, that do not fall under official cofinancing. h Nonsovereign cofinancing includes commercial cofinancing such as trade finance program cofinancing, B-loans, and parallel loans, among others.

6 ADB AR 2016 APPROVALS AND COMMITMENTS TOTAL DISBURSEMENTS FOR In 2016, ADB approvals including cofinancing totaled $31.70 billion. Of this total, LOANS AND GRANTS, 2012–2016 $17.47 billion was for sovereign and nonsovereign project approvals financed by ($ million) ADB ordinary capital resources (OCR), Asian Development Fund (ADF), and other special funds; $169 million was for technical assistance financed by special funds; 2012 8,592 and $14.06 billion was provided by cofinancing partners. 2013 8,542 ADB made commitments totaling $26.59 billion, of which $13.49 billion was ADB-funded and $13.10 billion was cofinanced. 2014 10,009

2015 12,225 DISBURSEMENTS In 2016, ADB issued $12.26 billion in loan and grant disbursements (OCR, ADF, 2016 12,262 and other special funds for grants), an increase of $37.95 million (0.3%) from 2015.

AVAILABLE RESOURCES Authorized and subscribed capital stock amounted to $143.02 billion and BORROWINGS (ORDINARY $142.70 billion, respectively. Other resources in OCR—revenue and net realized CAPITAL RESOURCES), 2012–2016 gains—amounted to $1.69 billion. Of this total, ADB generated $1.05 billion from ($ million) its loan portfolio, $398.55 million from the investment portfolio, and $79.24 million from equity investments and other sources. Resources in ADB’s Special Funds— 2012 15,067 contributions and revenue—totaled $507.86 million. These mainly included the ADF of $437.34 million, the Technical Assistance Special Fund of $54.19 million, 2013 12,725 the Asian Development Bank Institute’s $13.48 million, and the Financial Sector Development Partnership Special Fund of $2.85 million. 2014 14,724

In 2016, ADB raised $20.60 billion in medium- and long-term funds through 2015 20,265 public issues ($18.19 billion) and private placements ($2.41 billion). Public offerings included four global benchmark bonds denominated in US dollars and worth 2016 22,932 $9.75 billion. Following the launch of the Green Bond program in 2015, ADB issued a dual tranche green bond offering in 2016, raising a total of $1.30 billion. Total green bonds outstanding as of the end of 2016 was $1.80 billion. Consistent with its commitment OPERATING INCOME (ORDINARY to scale up climate financing, ADB intends to maintain a regular presence in the CAPITAL RESOURCES), 2012–2016 green bond market. ($ million)

2012 465 Resources as of 31 December 2016 2013 469 ($ million) 2012 2013 2014 2015 2016

Ordinary Capital Resources 2014 571 Authorized Capital 163,512 163,840 154,092 147,547 143,022 Subscribed Capital 163,129 162,809 153,056 147,052 142,699 2015 343 Paid-in Capital and Reserves 16,420 17,138 16,938 17,446 17,323 Outstanding Debta 64,762 61,615 62,688 66,054b 74,476b 2016 521 Asian Development Fund 33,346 33,359 31,478 30,784 30,948 a Includes accrued interest and commission. b Includes unamortized premium and/or discounts.

7 IMPROVING LIVES FOR A BETTER FUTURE

Over the past 50 years, the Asian Development Bank (ADB) has worked to transform Asia and the Pacific from a region that was once engulfed by debilitating poverty and hunger. Today, the countries of the region account for one-third of global gross domestic product and contribute more than half of the world’s economic growth. The emergence of Asia and the Pacific as an economic force has raised living standards in dramatic fashion for many countries. ADB has been privileged to serve its developing member countries (DMCs). In partnership with its members, ADB has mobilized $267 billion in loans and grants to build infrastructure (for transport, energy, ICT and water and other urban infrastructure and services), support agricultural development, particularly in the early years of ADB operations, provide education, improve health outcomes, stimulate business, combat climate change, attract investment, and strengthen regional cooperation and economic integration in Asia and the Pacific. The region is, however, still confronted by significant challenges and, even as the organization marks half a century of providing assistance, ADB has a lot of work to do. Among myriad development issues, the region faces the difficulties brought by rapid urbanization, the threat of climate change, and growing demand for water and energy. Poverty and inequality remain widespread. There are still 330 million people, or around 9% of the population of Asia and the Pacific, surviving on less than $1.90 a day, the threshold of extreme poverty. Another 1.2 billion people live on less than $3.10 a day, a poverty line more typical of low- and middle-income countries. In addition, the commitments made under the Sustainable Development Goals (SDGs) and the global climate agreement, adopted in

The Asian Development Bank (ADB) opens for 50 YEARS OF THE ASIAN business on 19 December 1966. Headquartered in the Philippine capital of Manila, ADB begins DEVELOPMENT BANK operations with 31 members, $1 billion in capital, and 40 staff.

8 ADB AR 2016 1966 ADB OPERATIONS, 2016 Ordinary Capital Resources and Asian Development Fund Approvals ($17.47 billion)

BY COUNTRY BY SECTOR 17% (15%) 0.3% (1%) INDIA INFORMATION AND 6% (5%) COMMUNICATION AGRICULTURE, NATURAL TECHNOLOGY RESOURCES, AND RURAL DEVELOPMENT 9% (12%) WATER AND 5% (4%) 26% (31%) OTHER URBAN EDUCATION OTHERS INFRASTRUCTURE AND SERVICES 12% (13%) PEOPLE'S REPUBLIC OF CHINA 22% (17%) TRANSPORT 26% (33%) 4% (6%) ENERGY VIET NAM 5% (5%) PHILIPPINES 10% (2%) 13% (10%) AZERBAIJAN PUBLIC SECTOR 6% (7%) MANAGEMENT 11% (15%) BANGLADESH FINANCE 10% (9%) 6% (0.1%) 1% (2%) 9% (11%) INDONESIA INDUSTRY HEALTH PAKISTAN AND TRADE

Numbers in paretheses are from 2015.

2015, set an ambitious international compared with levels provided in development agendas: inclusive development agenda. 2013–2016. ADF12 will allow ADB to growth, environmental sustainability, double the minimum allocation for and regional cooperation and small countries, provide grant and integration. MEETING FUTURE concessional resources to support CHALLENGES TODAY further disaster risk reduction, and Inclusive growth not only In 2016, to meet increasing offer greater assistance in regional generates more diverse economic demand from its DMCs, ADB’s health security. opportunities and improved total approved operations reached social services, but also allows a an all-time high of $31.70 billion In 2016, ADB continued to develop broader cross-section of society ($17.47 billion for sovereign and a new corporate strategy that, to access, and benefit from, those nonsovereign operations from ADB when completed, will guide ADB’s opportunities and services. In 2016, resources, $169 million for technical engagement with DMCs until 2030. ADB fostered inclusive economic assistance, and $14.06 billion from The strategy is expected to define growth through a variety of country- various cofinancing partners). Of how ADB operations will align with based and regional initiatives. This the $31.70 billion, ADB committed the SDGs approved in September included support for infrastructure $26.59 billion as financing operations 2015 and the new global climate development (particularly in lagging that have been approved and then agreement confirmed in Paris areas), education, health, and social signed by the counterparty or in December 2015. The strategy protection. In the Philippines, ADB borrower during 2016. This record is expected to propose ways to approved $400 million of additional lending reflects the scaling up strengthen ADB’s interaction with financing for a project to support of operations that has occurred middle-income countries as well social protection and provide more since the decision in April 2015 as deepen support to countries conditional cash transfers to around to merge ADB’s Asian Development in fragile and conflict-affected 4.4 million of the country’s poorest Fund (ADF) lending operations situations. Throughout 2016, ADB families. In Myanmar, ADB approved with its ordinary capital resources consulted extensively with various a $98.5 million education loan to (OCR) balance sheet. The merger, stakeholders—governments, help disadvantaged youth participate effective from January 2017, will the private sector, development in new economic opportunities, increase ADB’s financing capacity partners, and its own management including targeted skills training for to $20 billion by 2020. and staff—on developing the 41,000 young people and education new strategy. workers. To address population In May, ADB welcomed the aging, ADB approved technical agreement by donors during the assistance to support care for elderly 11th ADF replenishment (ADF 12), STRATEGIC FOCUS people in Indonesia, Mongolia, to pledge $3.3 billion for 2017–2020. MAINTAINED Sri Lanka, Thailand, Tonga, and Through the fund, ADB will, over Under its current long-term strategic Viet Nam. In April, ADB approved the next 4 years, increase grant framework, ADB continues to an action plan to promote inclusive support to its poorest DMCs by 70% promote three complementary business in Asia and the Pacific. 9 THEN AND NOW

1967–1976 2007–2016 $3.4 B $140.3 B

TOTAL ADB LENDING,* ASIA AND THE PACIFIC

* Loans, grants, and others.

The plan will support innovative ADB backed bus rapid transit industrial corridor from Vishapatnam private investment to solve problems projects for cities in the People’s to Chennai, which will connect India particular to poor and low-income Republic of China (PRC), the with global production networks. ADB countries. Lao People’s Democratic Republic approved a health security project (Lao PDR), and Mongolia. Through in the Greater Mekong Subregion ADB again contributed to these projects, ADB is helping to to improve responses to emerging environmental sustainability deliver quality infrastructure that is infectious diseases and other major with the approval of 81 projects environmentally friendly, with clean public threats in selected provinces worth $10.75 billion to support vehicles, automated fare systems, of Cambodia, the Lao PDR, Myanmar, sustainable infrastructure intelligent transport systems, and and Viet Nam. In September, and natural capital, improve energy-efficient street lighting. ADB approved its first operational environmental governance, and plan on regional cooperation and address climate change. ADB In 2016, ADB approved $5.4 billion integration, covering 2016–2020. remains focused on climate change in projects supporting regional The plan focuses on strengthening as one of its strategic priorities, cooperation and integration. regional connectivity; enhancing and is on track to meet its target ADB finance allowed work to competitiveness; and improving of investing $6 billion annually in commence on the 500-kilovolt regional resources and collective climate change projects by 2020. In electricity transmission line action on issues such as financial and 2016, ADB approved $4.44 billion between Afghanistan’s power disaster risks, cross-border health, (including $700.64 million in external import hubs, Pule Khumri and shared natural resources, and climate resources) for climate finance, the Kabul, with a transmission capacity commitments. highest level since tracking of climate of 1,000 megawatts. This will finance began 6 years ago. ADB enable year-round energy supply directed $3.25 billion to mitigate from Uzbekistan, Tajikistan, and STRONG SUPPORT climate change and $1.19 billion for Turkmenistan to Kabul and other ACROSS DIVERSE SECTORS adaptation. ADB supports the use of major load centers in southern and ADB approved $2.54 billion for advanced technologies to promote eastern Afghanistan. ADB approved renewable energy and energy energy efficiency and minimize $450 million for the PRC to improve efficiency projects in 2016, the sixth environmental impacts. In Viet Nam, infrastructure and trade between consecutive year its clean energy it supported metro rail projects the border areas of Guangxi and investment target has been exceeded. in Ha Noi and Ho Chi Minh City, northern Viet Nam. It also approved This is already approaching the providing cleaner, more efficient, and $370 million for India to enhance the 2020 target of $3 billion annually better integrated urban transport. growth and competitiveness of the for clean energy. Through its 2016

ADB lending is The first global oil crisis cripples many concentrated on energy, Asian economies. ADB acts swiftly, agriculture, transport, increasing energy sector financing to and finance. develop indigenous energy sources and improve energy efficiency.

ADB AR 2016 10 LATE 196Os EARLY 1970s HARNESSING A RIVER’S POWER IN PAKISTAN

Residents of the Pakistani town of Besham, in the country’s Khyber Pakhtunkhwa province, are among almost 5 million people set to see benefits flow from the mighty Indus River. For years, Pakistan has experienced power shortages, estimated at over 5,000 megawatts during peak demand. These shortages have led to blackouts and load shedding, in turn causing economic and social turmoil. Part of the solution is the Indus River, which roars down some of the world’s highest mountains and glaciers to sweep across the vast irrigated plains of Khyber Pakhtunkhwa, Punjab, and Sindh provinces. The Indus River network is estimated to have the potential to generate 60,000 to 70,000 megawatts of electricity, triple the total current demand in Pakistan. The Ranolia run-of-river hydropower project on the Indus River is part of broader efforts to harness Pakistan’s rich potential for clean energy. Ranolia is one of two hydropower projects being built by the Khyber Pakhtunkhwa provincial government under an ADB-supported program to develop renewable energy. The $510 million program—which is also financing four hydropower plants on irrigation canals in Punjab province—is part of a national plan to generate enough power to service about 600,000 new connections and improve the lives of 4.8 million people. The Ranolia project has brought significant local benefits, creating over 2,000 jobs during construction. Of those, about 150 were for skilled workers, many of whom will continue to work at the facility. In addition to employment for locals, the project upgraded a key road improving access to schools, a hospital, and markets in the nearby town of Besham.

investments, ADB helped its DMCs ADB approved its largest ever the UN Habitat III Conference in pursue their nationally determined rail initiative, supporting the Ecuador. contributions under the Paris construction of 102 kilometers of Agreement on Climate Change, new railway line in Bangladesh to ADB approved more than $2 billion resulting in additional capacity of improve subregional connectivity for urban development, water 2,056 megawatts from renewable and trade for about 2 million people supply, and sanitation projects energy sources, 4,692 gigawatt-hours in the Chittagong–Cox’s Bazar that support more livable cities. in electricity savings per year, and an corridor. In the same month, to It increased investment in the annual reduction in carbon dioxide enhance knowledge sharing and Pacific, approving projects valued emissions of 13.5 million tons. DMC dialogue on the SDGs in at $44 million. ADB promoted transport, ADB hosted its 5th ADB advanced technologies and climate ADB approved $4.09 billion in Transport Forum, with the 2016 resilience, approving $150 million loans and grants for transport subject being Sustainable Transport for the PRC to develop ecological projects. It approved road projects for All. In October, ADB and eight wetland parks for wastewater that will improve rural access and development partners signed a treatment, and $275 million for augment road capacity and quality, joint declaration on urban mobility a climate-resilient water supply while addressing road safety and to support the implementation of system in Dhaka, Bangladesh. road maintenance. In September, the New Urban Agenda adopted at In September, ADB approved

ADB takes on a broader role, becoming a ADB opens its first center of new thinking on development issues resident mission, located in Asia and the Pacific, while expanding in Bangladesh. its support to include the environment, education, and helping women and girls.

11 1980s 1982 $4.44 B COMMITTED TO FINANCE  CLIMATE CHANGE

$500 million to support a regional generation. ADB’s Water Financing In 2016, ADB approved assistance of economic corridor in India. The Partnership Facility supported $770.8 million to support education. project will stimulate economic 14 of the 28 projects approved, This includes investments directly growth and help develop ‘smart’ with $1.27 billion. Through these targeting the education sector as cities. In the same month, the investments, ADB is helping well as education components of Government of Japan provided a expand access to clean water multisector projects. ADB supported grant of $2 million to support an and sanitation, improve irrigation skills training projects to respond to ADB program on future cities, productivity and efficiency, and labor market needs in Bangladesh, which aims to identify smart enhance overall water security. Cambodia, and the Lao PDR, and solutions to improve the living In August, ADB published the made its first-ever education loan standards of urban dwellers, with Asian Water Development Outlook for skills training in Myanmar. It a particular focus on the poor and 2016, which assessed 29 of 48 also helped fund higher education women. In November, ADB signed countries in the region as being projects in the Pacific region and the a memorandum of intent with the water insecure. Responding to the Lao PDR, as well as school reform European Space Agency to use earth pressing issues of water scarcity projects in Nepal and Viet Nam. observation systems in designing and climate variability, ADB has These investments are estimated to urban development and water led pioneering work on employing benefit more than 7 million students projects. remote sensing technology to and train around 200,000 teachers. determine water availability In April, ADB, in close partnership ADB approved $2.42 billion for and usage, and to boost water with relevant donors, initiated the water projects in 2016. This includes productivity in irrigation. This work establishment of a global financing projects related to water supply and has delivered benefits in facility for education. At the 2016 sanitation, irrigation and drainage, Cambodia, India, Indonesia, International Skills Forum held flood management, water resource Pakistan, Sri Lanka, Uzbekistan, in September, ADB showcased management, and hydropower and Viet Nam. collaborative approaches to

The People’s Republic of China ADB plays a pioneering role in promoting joins ADB and India becomes economic cooperation, establishing the Greater an active borrower as lending Mekong Subregion program. The program has operations continue to expand since become a flagship of ADB operations and and regional activities grow. an example for countries in Central Asia and South Asia to follow.

12 ADB AR 2016 1986 EARLY 1990s incorporating skills development into nursing in the PRC; health sector help empower women and girls. ADB the design and implementation of its governance reforms in the Lao PDR; also continued to monitor the gender education projects. electronic health care development equality results of its completed in Uzbekistan; social health insurance projects. Across the region, around Total lending approved in and other health care programs 727,300 women and girls received the finance sector reached in Viet Nam; and universal health training on health care, teaching, $2.02 billion or 12% of all ADB coverage, elderly care, and primary banking and saving, entrepreneurship, lending in 2016, with 71% for health care in Bangladesh. It also and the operation and maintenance sovereign operations and 29% for earmarked additional ADF grants of irrigation and other civil works. nonsovereign operations. Lending in to eligible countries to strengthen ADB helped around 62,800 women 2016 was concentrated on financing regional health security. start activities to generate an income and leasing for small and medium- or improve their livelihoods, while sized enterprises, money and capital For agriculture, natural resources, about 97,400 women participated in markets, inclusive finance, and and rural development, in local governance and community- finance sector development. ADB 2016, ADB approved $1.08 billion level committees and groups. In the invested in innovative products and in sovereign loans and grants, Lao PDR, ADB helped give women advanced technology projects to and $240 million in nonsovereign and children from minority groups develop the region’s finance sector. investments. To improve food access to high-quality health care One example is the establishment supply and quality, ADB increased and treatment. The project saw the of a $500 million financing facility at its investments into agriculture and proportion of births attended by a the Punjab National Bank—one of food value chains, including logistics, skilled nurse increase from 25% to India’s largest commercial banks— quality and safety standards, climate- 58% in project areas. which will use the funds to onlend resilient technologies, and other to developers and end-users processes that enhance productivity. Environment and Climate to install rooftop solar systems ADB is also working to address the Change. ADB organized the throughout India. dwindling of natural resources and first Green Business Forum to shrinking labor forces in rural areas highlight the role of the private Over the year, ADB approved through the adoption of modern sector in achieving environmentally $341.0 million for health sector technologies such as satellite- sustainable growth. The forum investments. It approved $175 million based remote sensing, geographic attracted more than 400 participants, to support the health component information systems, drip irrigation, including green business leaders, of a social protection program in and information and communication government officials, and other the Philippines; $1 million for the technologies. stakeholders looking to share construction of primary health care innovative green business solutions, facilities in Sri Lanka; $125 million exchange knowledge on clean for improving regional cooperation ADDRESSING GLOBAL technologies and sustainable and control of communicable ISSUES management approaches, and diseases in border areas of the Gender. In 2016, 44% of all newly build partnerships. In 2016, ADB Greater Mekong Subregion, such approved projects—notably in also backed country-specific and as financing a joint outbreak education, health, social protection, regional projects to support different investigation; and $40 million for a agriculture, infrastructure, public aspects of sustainability. In the PRC, public–private partnership on elderly sector management, industry and it approved $500 million to establish care in the PRC. ADB approved trade, and finance—had gender a dedicated green financing platform technical assistance for geriatric equality components, particularly to to improve air quality in the Greater

The Asian financial crisis strikes. ADB and other international ADB introduces a financial institutions rally to help countries stabilize their signature strategy economies. For Indonesia, the Republic of Korea, and to make poverty Thailand—the three most affected countries—ADB commits reduction its $7.8 billion in quick-disbursing financing from 1997–1999. overarching goal.

13 1997 1999 Beijing-Tianjin-Hebei region. In disaster contingency loan, providing achieved $31.70 billion in operations Myanmar, ADB approved a loan $10 million to the Cook Islands. In by leveraging $14.06 billion in of $75 million to modernize the the wake of Cyclone Winston in Fiji, cofinancing (including trust agriculture sector in the country’s ADB approved a loan of $50 million funds administered by ADB). central Dry Zone. The loan also for short-term financing of disaster It attracted 60% of cofinancing from supported improved irrigation recovery programs, including official development institutions and district-wide agriculture value infrastructure reconstruction, and other concessional sources, chains, with an additional Global school rehabilitation, and housing including bilateral and multilateral Environment Facility grant to assistance. It also provided organizations, other public agencies, improve land management and humanitarian disaster assistance national partners, and corporate protect forest reserves. To address grants from the Asia Pacific Disaster programs for social responsibility. climate change, ADB approved a Response Fund to Fiji, Mongolia, It drew 40% from commercial credit enhancement for geothermal the Marshall Islands, Sri Lanka, and cofinancing sources. energy in the Philippines. This Viet Nam. ADB is increasing efforts supported the issuance of a certified to incorporate disaster risk reduction During the year, ADB entered into project climate bond—a first for a into its projects. It is strengthening an innovative guarantee agreement single project in an emerging market. tools to screen climate risks and with the Swedish International Working with the private sector, is developing related guidance Development Cooperation Agency, ADB also approved $100 million materials. This will help ADB better which will allow ADB to increase to demonstrate climate-resilient integrate disaster risk reduction into its financing by $500 million farming systems in the PRC. The country partnership strategies and over the next 10 years. ADB also Climate Change Fund, capitalized individual projects. established two new trust funds. by ADB’s own net income, played The first is the Leading Asia’s Private a pivotal role in managing climate Governance. In Indonesia, ADB Sector Infrastructure Fund, with risks in ADB investments. In 2016, piloted new initiatives to strengthen $1.5 billion in equity from the Japan ADB was able to secure approval public service delivery at the local International Cooperation Agency of $12 million from the Green level. It also supported reforms to to fill financing gaps and increase Climate Fund for the Cook Islands improve the country’s investment access to finance of nonsovereign to install energy storage systems and climate and strengthen fiscal policies infrastructure projects in Asia and support private sector investment for sustainable development. In the Pacific. The second is the Project in renewable energy. The Green Armenia, ADB provided a second Readiness Improvement Trust Climate Fund also approved a grant phase of support for a program Fund, with an initial contribution of $5 million to support a renewable to improve public financial of $7.7 million from the Nordic energy program in the Pacific, management and utility regulation, Development Fund. This trust fund which will help the Cook Islands, leading to better management will help countries in Southeast the Marshall Islands, the Federated and enhanced sustainability of the Asia improve project readiness and States of Micronesia, Nauru, Papua country’s road, water, and power develop climate-resilient projects. In New Guinea, Samoa, and Tonga assets. In Pakistan, ADB approved a 2016, ADB finalized new frameworks move away from diesel power reform program that will introduce for cofinancing with the Agence generation and toward solar power, new corporate governance rules into Française de Développement, the hydropower, and wind energy. 191 federal public sector enterprises. Eurasian Development Bank, and the Organization of the Petroleum Disaster Resilience. In 2016, ADB Exporting Countries Fund for approved funding for 52 projects COLLABORATION International Development. It that directly reduced disaster DELIVERS GREATER also approved its first two projects risk, integrated disaster resilience IMPACT to be cofinanced with the Asian measures, or supported disaster ADB knows that it takes coordinated Infrastructure Investment Bank— response. ADB approved $200 effort and combined resources one a highway project in Pakistan, million to help establish a national to address the enormous the other a natural gas infrastructure disaster risk management fund development challenges across and efficiency improvement project in Pakistan. It approved its first Asia and the Pacific. In 2016, it in Bangladesh.

ADB mobilizes $850 million The global financial crisis hits. In the aftermath, for the Asian Tsunami Fund ADB responds with massive financial support for its for tsunami-hit areas of India, developing member countries, as well as new funding Indonesia, the Maldives, and instruments to provide fiscal support to countries in Sri Lanka. debt distress.

14 ADB AR 2016 2005 2008–2009 70% INCREASE TO THE POOREST COUNTRIES IN THE NEXT 4 YEARS

ADB and other multilateral private partnership projects. development banks continued to To help develop bankable partner with commercial banks, projects, ADB secured five new project developers, and other transaction advisory mandates in financiers to mobilize financing for 2016, to advise on infrastructure WHAT DRIVES FOREIGN projects. In 2016, projects totaling approximately private sector DIRECT INVESTMENT? ADB-supported nonsovereign $1.5 billion. It continues to The role of foreign direct projects mobilized $5.84 billion in capitalize on donor trust funds, investment (FDI) in stimulating financing from external sources. such as the Asia Pacific Project economic growth and B-loans (where commercial banks Preparation Facility. development is widely recognized, lend under ADB’s umbrella) and but its success is not automatic. In parallel cofinancing contributed ADB aims to strengthen its December 2015, ADB published the Asian Economic Integration $3.4 billion to this figure. Through credentials as a knowledge institution further. It aligns Report 2016 to explore key its Trade Finance Program and its determinants of a multinational’s Supply Chain Finance Program, knowledge work with the needs decision to invest in Asia and ADB generated $1.9 billion to of its DMCs through country the Pacific. The report assesses facilitate regional trade. ADB further knowledge plans and knowledge credible policy reforms and extended its financial reach with partnerships, as well as learning institution building to maximize across sector and thematic groups. the region’s chances of attracting guarantees and risk transfers of productive FDI. $282 million. ADB has introduced new tools to focus on client needs and ADB continues to support create efficiencies in knowledge public–private partnerships, management. These tools include with the aim of increasing private a planning tool for knowledge sector participation in public products and services, a repository infrastructure. It has done so that promotes the reuse of sector by building the capacity of key and thematic learning materials, public sector agencies in DMCs; and Development Asia, a proof- by strengthening policy, legal, of-concept website that uses a and institutional frameworks; by digital-first and evidence-based supporting project preparation approach to make it easier to activities; and by financing public– create, find, and use content. 2016 The ADB Board of Governors approves the merger of the lending operations of the Asian Development Fund with the institution’s ADB is the region’s premier ordinary capital resources balance sheet. The move will increase development bank, with ADB’s financing capacity (annual approvals of new loans and 67 members, 48 in the grants) to $20 billion by 2020 and allow greater support for the region, and operations developing member countries most in need. totaling $31.70 billion.

15 2015 CENTRAL AND WEST ASIA AFGHANISTAN, ARMENIA, AZERBAIJAN, GEORGIA, KAZAKHSTAN, THE KYRGYZ REPUBLIC, PAKISTAN, TAJIKISTAN, TURKMENISTAN, UZBEKISTAN

Many of the economies in Central OPERATIONAL and West Asia experienced another HIGHLIGHTS difficult year in 2016. In 2016, ADB approved $4.76 billion in loans and grants to improve the lives of As revenues from oil and natural people in Central and West Asia, and gas again dropped significantly attracted $2.18 billion in cofinancing. over the year, the hydrocarbon About $2.98 billion worth of contracts exporters—Azerbaijan, Kazakhstan, were awarded, and ADB disbursed Turkmenistan, and Uzbekistan— about $3.05 billion. faced weakened fiscal positions and current accounts. While Kazakhstan ADB earmarked three quarters undertook a fiscal stimulus program of its lending and grants in 2016 to counteract the effects of sharp for energy (31%), public sector inflation, Azerbaijan could not avert a management (24%), and transport recession in 2016. (21%). The remaining quarter was The economies of Armenia, Georgia, allocated to finance (11%); water and Tajikistan were confronted by and urban infrastructure (7%); and further reductions in remittances, agriculture, natural resources, and rural because the ongoing recession in development (6%). the Russian Federation and slower In the energy sector, ADB approved growth in Central Asia’s commodity- almost $1.5 billion and about exporting countries meant fewer $500 million in cofinancing to improve employment opportunities for electricity infrastructure and increase migrant workers. the regional production and export of On the other hand, the Kyrgyz gas. Two projects were approved to help ease the recession caused by Republic joined the Eurasian rehabilitate more than 3,000 kilometers depressed oil prices and the loss of Economic Union, improving its (km) of distribution lines in Azerbaijan income from major trading partners. access to the labor market in the and expand the high-voltage Russian Federation. This contributed transmission network in Pakistan. In the transport sector, ADB to the recovery of remittances In December, ADB committed a committed about $1 billion in loans received by the Kyrgyz Republic nonsovereign loan and a partial credit and grants, with $610 million in in 2016. guarantee to expand the Shah Deniz cofinancing. In Afghanistan, ADB gas field in Azerbaijan. supported two major transport Despite the challenges of ongoing projects. In August, it initiated a conflict and regional instability, ADB supported public sector feasibility and design study for economic growth in Afghanistan management with almost $1.2 billion. the rehabilitation and upgrade was sustained in 2016. In Pakistan, In November, it approved the second of the Salang Corridor—one of the export performance remained phase of a program in Armenia to few viable land routes linking the weak, but the economy benefited improve the sustainability of the north and south of Afghanistan from the combined impact of the country’s road, water, and energy and beyond. In October, it approved government’s macroeconomic and infrastructure. In December, ADB a second project to procure and structural reform program, along with approved a loan of $500 million for install a comprehensive system low global oil prices, which reduced Azerbaijan, the first under the refined to better manage Afghanistan’s the country’s import bill. Countercyclical Support Facility, to road assets.

Afghanistan and ADB operations in the region are quite 50 YEARS OF ADB Pakistan join the Asian diversified and include projects for IN CENTRAL AND Development Bank (ADB) the Industrial Development Bank of WEST ASIA as founding members. Pakistan, rice milling, cotton milling and processing, agriculture and irrigation, fisheries, roads, and energy.

16 ADB AR 2016 1966 1970s and 1980s GOING THE DISTANCE FOR ENERGY EFFICIENCY

While Uzbekistan is rich in hydrocarbons and has been self-sufficient in power generation since the 1990s, the country faces an unusual energy paradox. Uzbekistan’s southern region, which accounts for 90% of domestic gas production, receives electricity from the northern provinces, where 70% of power generation infrastructure is currently located. This means gas is transported at great cost to the north where it is burned to produce electricity, which is then sent back to customers in the south. ADB is helping make Uzbekistan’s energy production more efficient. Along with $300 million from the Japan International Cooperation Agency, ADB provided a loan of $350 million to build two power generation units at the Talimarjan power plant, only 30 kilometers (km) from the Shurtan gas field, in the southeastern province of Kashkadarya. The new combined-cycle gas turbines—the cleanest and most efficient fossil fuel-burning technology available—are set to improve the plant’s efficiency enormously. “The plant will save 500 million cubic meters of gas per year,” says Murod Karimov, the plant’s construction manager. Getting the gas turbines to Kashkadarya Province took more than a year. The two 400-ton turbines traveled over 16,800 km from Kobe, Japan. They were transported by ship to the Caspian Sea port of Kuriyk, in Kazakhstan. From there, the journey continued overland on a specially designed trailer boasting 48 axels and 1,056 tires—and moving at around 5 km per hour.

YOUR SAY:

Through a postflood rehabilitation West Asia by providing basic services, “The project will project in Pakistan, ADB will facilitating enterprise, and creating help restore critical transport jobs and opportunities for the poor. provide my family infrastructure that sustains with a constant livelihoods and allows access to In Pakistan, ADB approved a markets. This includes repairing $325 million results-based lending flow of clean water. 212 km of degraded highway and program in November, to provide 33 damaged bridges. ADB approved electricity to 1,000 remote We appreciate very advances in financing for the communities, 23,000 schools, much the benefit.” project design of two advanced bus and 2,587 basic health facilities. networks—one in Karachi and one MZIA TSINTSABADZE, on an urban water in Peshawar—that promote rapid In Uzbekistan, ADB committed a and sewerage project in Ureki, Georgia and environmentally sustainable loan of $120 million to improve access commuting. to safe, reliable, sustainable, and affordable water for over 260,000 inhabitants in the Kibray and Zangiota PROMOTING INCLUSIVE districts of Tashkent. GROWTH In 2016, ADB strived for more In Georgia, ADB approved an inclusive development in Central and additional $99 million as part of an

After the fall of the Soviet Union, countries The region experiences rapid economic from Central Asia and the Caucasus (Armenia, growth, particularly in the petroleum- Azerbaijan, Georgia, Kazakhstan, the Kyrgyz exporting countries, in Pakistan, and Republic, Tajikistan, Turkmenistan, and Uzbekistan) in Afghanistan following the demise of join ADB. This ultimately leads to the creation of the Taliban regime. the Central and West Asia Department within ADB.

17 1990s Early 2000s THEN AND NOW

1967–1976 2007–2016 $490 M $35.77 B

TOTAL ADB LENDING,* CENTRAL AND WEST ASIA * Loans, grants, and others.

ongoing multitranche financing facility to finance, reduce the cost of doing In Azerbaijan, ADB provided support for an urban services improvement business, and diversify exports. of $75 million to deliver safe drinking program. The program is constructing water and improve sanitation services water supply and sewerage systems to around 7,000 households in that will benefit more than 60,000 GREEN PROJECTS TO Agdash and Beylagan. people in the rural towns of Marneuli, BOOST FOOD SECURITY Bolnisi, and Chiatura. In 2016, ADB assessed around 40 projects for better management NEW PARTNERSHIPS IN ADB also provided a program loan of climate risks in the countries REGIONAL INTEGRATION of $100 million to help the of Central and West Asia. It also The Central Asia Regional Economic Government of Georgia better approved 24 projects related to Cooperation (CAREC) Program again manage debt, fiscal risk, revenue, and environmental sustainability in achieved significant milestones in public expenditure. The program will the region. 2016. In November, Georgia became help address inequality of income CAREC’s 11th member at the 15th by creating more opportunities for In Afghanistan, ADB invested Ministerial Conference in Islamabad. businesses and individuals (with 40% $76 million to rehabilitate and This was a major boost for regional of resources allocated to businesses upgrade irrigation infrastructure, cooperation and integration in owned by women). including watershed management. Central and West Asia. The project will increase agricultural In Kazakhstan and Uzbekistan, ADB is productivity in the Panj-Amu River ADB approved a loan of $100 million supporting credit lines to help micro, Basin, improving cropping intensities, for a highway project in Pakistan, its small, and medium-sized enterprises. irrigated areas, and crop yields across first cofinancing venture with the In Kazakhstan, ADB will help 5,000 74,500 hectares. Asian Infrastructure Investment microenterprises (with at least 50% Bank (AIIB). With the AIIB’s owned by women) and 1,000 small In October, ADB approved financial additional $100 million and a grant and medium-sized enterprises (with assistance of $30 million—including of $34 million from the United at least 33% owned by women). ADB a combined grant and technical Kingdom, the project will build the has allocated 60% of the funds for assistance of $5 million from the remaining 64 km of the highway areas outside Almaty and Astana. In Japan Fund for Poverty Reduction—to connecting Shorkot and Khanewal Uzbekistan, ADB will support 6,700 boost agriculture production and food in Punjab province. The road section businesses (with at least 20% owned security in Tajikistan. The project will is a key part of the 1,800 km CAREC by women), and has allocated 60% of improve water resource management transport corridor. eligible loans to businesses operating in the Pyanj River Basin. It aims outside Tashkent. to modernize and climate-proof With cofinancing from the European irrigation and drainage infrastructure, Investment Bank, ADB approved a In Tajikistan and the Kyrgyz Republic, while enhancing farmers’ water-use loan of $50 million to improve the ADB is working to improve access and farm management skills. standard and safety of the region’s

ADB plays a key role in establishing the While the global financial crisis slows Central Asia Regional Economic Cooperation economic growth, several countries in the (CAREC) Program. CAREC has since achieved region are poised to attain upper middle- cumulative investment of $29.4 billion, with income status. ADB contributing 35% of the total.

18 ADB AR 2016 2001 2008–2009 M6 Highway. One of the most needed to create good jobs strategic routes for internal and in Central Asia and the South external trade, the stretch of road Caucasus. The study examines runs from Vanadzor in northern current policy frameworks, Armenia to Bagratashen at the employment and labor market border with Georgia. policies, and the impact of recent PROMOTING PRIVATE POWER external economic shocks. It will In October, ADB hosted the first Central The largest regional energy project provide policy recommendations Asia Regional Economic Cooperation is 1,600 km of gas pipeline to be laid (CAREC) Energy Investment Forum for strategies that can build skills in Islamabad, Pakistan. The event was through Turkmenistan, Afghanistan, that are in high market demand cohosted by Pakistan’s Private Power and Pakistan, and India. In 2016, ADB and promote greater labor market Investment Board. Governments from completed its first advisory mandate. flexibility. It will also recommend countries active in CAREC highlighted As transaction advisor, ADB helped strategies to create employment existing policies, regulations, and establish the project company through private sector development incentives to attract private investment in power generation and distribution. and facilitated agreement among and economic diversification in the parties on their shareholding They showcased successful private the region. investments in the region’s power sector percentages and deployment of their and presented new projects seeking own funds to finance engineering In June, ADB published a gender investors. and route surveys, environmental assessment for Tajikistan that and social safeguard studies, and reexamined the country’s gender procurement and financing activities barriers to economic opportunities, in the next phase. social services, and leadership positions. The assessment identified entry points for promoting gender KNOWLEDGE SHARING equality in agriculture and natural BEYOND BORDERS resources, education, energy, ADB initiated a flagship study that entrepreneurship and small business aims to identify the conditions development, and transport. 2016

ADB begins an investment program that, by 2016, helps to build ADB’s cumulative lending or upgrade nearly 6,500 kilometers of roads across Central and to developing member West Asia; deliver new or improved water supply to nearly one countries in Central and million households in Georgia, the Kyrgyz Republic, Pakistan, and West Asia reaches almost Uzbekistan; and rehabilitate over 363,000 hectares of land in the $56 billion, with nearly Kyrgyz Republic, Tajikistan, and Uzbekistan. 1,700 projects approved. 19 2010 EAST ASIA PEOPLE’S REPUBLIC OF CHINA, MONGOLIA

The economies of East Asia posted term and place economic growth in a contrasting results in 2016. sustainable path in the longer run. Economic growth in the People’s Republic of China (PRC) averaged OPERATIONAL 6.7%. The Government of the PRC is HIGHLIGHTS making progress in rebalancing the In 2016, ADB approved $1.86 billion for economy from investment-driven 15 sovereign loan and grant projects to consumption-driven growth. in East Asia. This assistance, together It is endeavoring to make growth with $515.8 million of cofinancing, was less resource intensive and more allocated to energy (35%), agriculture environment friendly. However, and natural resources and rural while this rebalancing is desirable, development (30%), transport (13%), it is putting pressure on specific water and other urban infrastructure enterprises, industries, and regions. and services (9%), industry and trade Developing new engines of growth (7%), health (3%), public sector remains a key economic challenge management (2%), and finance (1%). for the PRC, where income inequality In addition, ADB approved $18.2 and disparities in regional and million for 43 technical assistance urban–rural living standards remain a projects. challenge. In March, the government adopted the Thirteenth Five-Year ADB responded to pressing Plan for 2016–2020, which sets out development needs in the PRC, a comprehensive reform agenda to including severe air pollution and tackle these challenges. The plan also major demographic changes. ADB addresses the need to protect the approved $500 million in December environment. to improve air quality in the Beijing– partnership (PPP) for improved Tianjin–Hebei region. The loan will elderly care services in Hubei The economic slowdown continued reduce the greenhouse gas emissions province, benefitting 25,000 people. in Mongolia and GDP growth stood from small and medium-sized at 1% in 2016 down from 2.4% in enterprises by 5 million tons per year In Mongolia, ADB is providing 2015. However, following a surge by 2024, directly benefitting about economic support during the in mineral prices, growth reached 268 million people. downturn, with a new technical 7.8% in the fourth quarter of 2016, assistance project approved to signaling a change in trend. The still ADB also approved a $150 million provide macroeconomic advice and modest recovery in foreign direct project that will focus on a $35 million technical assistance investment inflows, a strained environmental protection, ecological loan to the state-owned enterprise fiscal stance, and looming debt rehabilitation, and climate change Erdenes Mongol to strengthen repayments increased balance adaptation in Qinghai province. its governance and management of payments pressures. Against capacities. This loan will help this backdrop, the Government of To address the issue of an aging Mongolia better manage its crucial Mongolia sought assistance from the population and promote private state assets for the benefit of the International Monetary Fund and the participation in service delivery, ADB country’s population of 3.1 million. international community to restore developed and approved a $50 million To prepare disadvantaged Mongolians macroeconomic stability in the short demonstration public–private for work, ADB supported skills

Economic reforms underway ADB partners with the People’s 50 YEARS OF ADB in Hong Kong, China; Republic of China (PRC) to IN EAST ASIA the Republic of Korea; help the country achieve its and Taipei,China lay the ambitious development agenda foundations for the region’s and address economic, social, and dramatic rise. demographic challenges.

20 ADB AR 2016 1966–1970s 1986 ADB HELPS NOURISH YOUNG MINDS IN MONGOLIA

Namjilsuren Gombo and her five daughters live in a simple ger (a round hut made of canvas) on a mountainside on the outskirts of Ulaanbaatar, Mongolia. With an eighth-grade education and earning only a small income, 42-year-old Namjilsuren, who is a single parent, struggled for years to take care of her daughters. Some months, just keeping the children fed meant giving up other necessities. “Sometimes we didn’t have notebooks for them to use in school,” Namjilsuren says. “There were times before when I used to cry because I felt helpless.” Today, however, the Gombo family is enrolled in a food-stamp program run by the Government of Mongolia. The program helps Namjilsuren and thousands like her to buy flour, rice, and other basic commodities. Food stamps represent about 10% of average monthly spending for such vulnerable households in Mongolia, and using the stamps frees up money for other necessities. The food stamp program was, in large part, made possible by an ADB-funded social welfare project on food and nutrition, which played a crucial role in helping the government create the system. As a result of the program, the average daily calorie intake of Mongolia’s poorest 20% has increased from 1,728 in 2004 to at least 2,000 calories in 2015. “With full stomachs, the children are much happier going to school and their grades have improved,” Namjilsuren Gombo says. “They never miss school, they are better fed, and they have something to wear. They are happy attending their classes.”

YOUR SAY: development and approved a project MAKING INCLUSIVE “It is much easier to improve access to, and the quality GROWTH WORK FOR ALL of, Mongolia’s education services. ADB promotes gender equality in and cheaper to In November, ADB signed an the PRC, and helps women benefit operational agreement with UNICEF from access to finance. For example, receive care near to improve water, sanitation, and ADB supported the entrepreneurial hygiene in schools and dormitories activities of rural women from four home.” villages in two counties in Shanxi across the country. NARANKHUU DONDOG, a 33-year-old Province, through a grant that accountant, who can now be treated locally Responding to a dzud (a winter improved women’s capacity to thanks to an ADB health project in Khotont disaster resulting in mass livestock choose, produce, finance, and market County, Mongolia. deaths), ADB helped Mongolia high-value agricultural products. This secure a grant of $2 million from the initiative established 74 women’s Asia Pacific Disaster Response Fund. production groups, enhanced farming To prevent and mitigate the impact skills, and financed entrepreneurial of disasters including dzud, and forest activities of 191 beneficiaries. and steppe fires, ADB facilitated a Capacity building for 112 local grant of $3 million from the Japan government counterparts aimed to Fund for Poverty Reduction (JFPR). increase awareness about gender

ADB approves its ADB begins providing loans and ADB commences a first loan to the technical assistance to support program of investments PRC for the China the PRC’s environmental totaling $16 billion for Investment Bank. protection, river and lake transport in the PRC, rehabilitation, wastewater starting with railway and treatment, and pollution control. port developments.

21 1987 1988 1989 THEN AND NOW

1967–1976 2007–2016 $694 M $19.23 B

TOTAL ADB LENDING,* EAST ASIA * Loans, grants, and others.

issues and facilitate expansion of providing rural communities with areas (traditional tent communities) the model. increased access to clean energy and on the outskirts of Ulaanbaatar. In helping reduce the use of chemical 2016, a number of ger areas were In October, ADB approved a rural fertilizers. connected to the central wastewater road project of $100 million to help system, potentially benefitting reduce poverty in Liupanshan, In November, ADB approved a loan around 30,000 residents. ADB also Ningxia Hui Autonomous Region. of $150 million to establish a financing approved additional financing of The improved roads will broaden platform to fund clean energy $19.43 million to help construct access to opportunities for poor investments in Shaanxi province. four wastewater treatment plants in people in around 870 villages. The platform will channel domestic border towns of the Dornogovi and ADB is also helping to bridge regional financing into energy efficiency, Omnogovi provinces in Southeast equity gaps in the PRC. In November, distributed renewable energy, and Gobi, benefitting about 94,300 it approved $150 million for Chongqing environmental improvements. In May, residents. municipality to create logistics parks ADB approved a technical assistance and related infrastructure. Developing project to help propose a road map the city as a transport and logistics hub and policy measures for developing REGIONAL COOPERATION will be a major spur to job creation for the PRC’s biomass heat supply TO LIFT TRADE In the PRC, ADB approved the city. industry. $450 million under the Greater Through support for agriculture and During 2016, ADB approved Mekong Subregion program to rural development in poor regions of $450 million for integrated water improve connections between the Mongolia, ADB helped develop six resources and environmental PRC’s relatively poor Guangxi Zhuang agribusinesses that produce cashmere, management projects in Henan, Autonomous Region and Viet Nam’s meat, and dairy products. ADB also Jiangxi, and Shandong provinces, northern border provinces of supports Mongolia’s young people benefitting 40.5 million people. Cao Bang, Ha Giang, Lang Son, through major investments in skills These projects will help redress and Quang Ninh. The program will development and higher education. overexploited groundwater resources, strengthen economic partnerships An increased focus on gender equity implement pilot initiatives that between the two countries. led to the approval of a new JFPR promote green development, and project to implement stronger national harmonize flood and environmental Under the Central Asia Regional and local gender equity legislation. management in river basins. Economic Cooperation program, ADB is helping Mongolia upgrade its In Mongolia, ADB is helping tackle sanitary and phytosanitary standards, ENVIRONMENTAL critical levels of soil pollution caused which are essential to developing INVESTMENT EXPANDS by lack of sanitation, with a JFPR grant agricultural trade and diversifying the In the PRC, ADB has helped complete of $2.8 million approved in November economy. In April, ADB approved a 48 medium and large biogas plants, to help manage soil pollution in the ger complementary loan of $27 million to

Mongolia joins ADB as a developing member country. ADB starts actively ADB begins a program of assistance to implement promoting energy market reforms, broaden financial markets, establish efficiency and renewable key infrastructure (especially in transport), develop energy in the PRC. agribusiness, revitalize secondary towns and cities, and restructure social services, including education and health.

22 ADB AR 2016 1991 2000 improve border services and trade decline due to reliance on coal flows at the Altanbulag, Bichigt, mining. In November, ADB held and Zamiin-Uud border crossing an international conference on points. Work is also proceeding ecocompensation, a tool developed on the western regional road by the Government of the PRC corridor, which will connect isolated to promote ecological protection. CELEBRATING 30 YEARS western Mongolia with the PRC ADB also held its first countrywide OF SUPPORT and the Russian Federation, workshop on gender equality in On 10 November, at a symposium to commemorate 30 Years of ADB- increasing trade and investment the labor market titled “Gender, PRC partnership, ADB President opportunities. Labor and Migration in the PRC.” Takehiko Nakao gave an opening Throughout the year, the Regional speech to confirm that ADB, Knowledge Sharing Initiative, a through its finance and knowledge GROWTH THROUGH program jointly established by work, stands ready to help the PRC KNOWLEDGE SHARING ADB and the PRC government to further transform and address economic, social, and demographic In 2016, ADB held events to help facilitate exchange of development- address the PRC’s economic, social, challenges. At the symposium, over related knowledge among ADB’s 200 delegates discussed the PRC’s and demographic challenges. Four DMCs, hosted events in the PRC past achievements and future technical assistance projects on on water resources management, outlook. PPPs provided training workshops special economic zones, structural to more than 1,000 government transformation, and low carbon officials and produced four technology. knowledge products. In July, an international conference attracted In Mongolia, ADB introduced a more than 150 participants to macroeconomic database and Hegang City, Heilongjiang province short-term forecasting model for to discuss opportunities for key stakeholders as another means economic diversification of four of helping the government to better cities that have been in economic develop macroeconomic policy. 2016 In Mongolia, ADB approves In the PRC, ADB approves its first $160 million to develop results-based loan of $150 million in ADB’s cumulative Ulaanbaatar’s informal ger Guizhou province to upgrade training lending to the PRC areas, and mobilizing facilities, develop a curriculum aligned and Mongolia reaches, confinancing of €50 million with the needs of industry, and train respectively, $37 billion from European Investment Bank. teachers and school managers. and $2 billion.

23 2013 2015 PACIFIC THE COOK ISLANDS, FIJI, KIRIBATI, THE MARSHALL ISLANDS, THE FEDERATED STATES OF MICRONESIA, NAURU, PALAU, PAPUA NEW GUINEA, SAMOA, SOLOMON ISLANDS, TIMOR-LESTE, TONGA, TUVALU, VANUATU

ADB supports 14 developing growth in 2016. Adverse effects member countries in the Pacific. stemming from El Niño also affected In 2016, eight of these countries Pacific countries, with droughts enjoyed stronger economic growth, harming agriculture in the Federated while growth in others slowed due States of Micronesia and tourism in to low commodity prices and the Palau. impacts of natural disasters. Vanuatu experienced a broad OPERATIONAL economic recovery, driven by HIGHLIGHTS cyclone reconstruction initiatives In 2016, ADB approved a record and other infrastructure projects. $596 million for 23 loan and grant Repairs to damaged mooring projects in the Pacific, along facilities in Nauru allowed phosphate with $30 million for 31 technical exports to resume late in the year. assistance projects. ADB projects Strong tourism arrivals helped also attracted $223 million in strengthen growth in Samoa and cofinancing. the Cook Islands. On the back of increased public spending, growth New approvals were focused on accelerated in the Marshall Islands, PNG (47%), Fiji (25%), and Timor- Solomon Islands, Timor-Leste, and Leste (9%), although 19% of total Tuvalu. In Tonga, the economy approvals went to the smaller Pacific continued its robust expansion, island countries. although the growth rate was slightly lower than in 2015. ADB investments were mainly directed to transport (75%), public By contrast, ongoing fiscal sector management (13%), and water contraction held back economic and other urban infrastructure and cofinancing of $23 million from activity in Papua New Guinea services (8%). the Government of Australia, to (PNG), the Pacific’s largest improve the safety of land and economy. Project implementation In the transport sector, ADB maritime transport systems. In delays in PNG limited the economic approved a total of $248 million to Timor-Leste, ADB approved stimulus provided by public help PNG establish a sustainable a loan of $50 million in November investment. In Kiribati, construction civil aviation network. In the to help upgrade and climate- of major infrastructure projects Highlands Region of PNG, the safe proof 105 km of national road wound down, reducing economic movement of goods and people between Dili and Baucau. Also in stimulus. will be enhanced by a $129 million November, ADB approved a grant investment (combined with of $11 million, with cofinancing Extreme weather events again $20 million in cofinancing from the of $500,000 from the Least weighed on economic activity, as European Union) to improve and Developed Countries Fund, to Cyclone Winston wrought damage rehabilitate over 313 kilometers improve outer islands maritime and losses equivalent to 31% of (km) of roads used by 40% of infrastructure in Tuvalu, which is Fiji’s gross domestic product. In the country’s population. In critical for providing food, fuel, spite of this, Fiji achieved a seventh Solomon Islands, ADB approved and other lifeline support to these consecutive year of economic a loan of $21 million in May, with remote communities.

ADB commences ADB approves its first loan in the operations in the Pacific Pacific, a loan of $2.4 million to 50 YEARS OF ADB in December. There is Samoa is for the development of IN THE PACIFIC only one ADB developing the Faleolo Airport and its main member country in the connecting road. region, Samoa.

24 ADB AR 2016 1966 1969 FINANCIAL TRAINING SAVES MILES FOR MAINO

Maino Trudi lives in a small village outside the Papua New Guinea (PNG) capital of Port Moresby. She supports a family of five children and eight grandchildren by selling fish and growing tomatoes and corn. Before Maino participated in financial literacy training, provided with ADB support, she had no choice but to travel many hours to her nearest bank branch. The training is part of an ADB project to expand microfinance in PNG, aiming to improve financial literacy and provide sustainable financial services across the country. About 85% of PNG’s population live in rural areas, and a large proportion of these people have very limited education and low literacy rates. Most people have never used a financial institution. Thanks to the training, Maino now knows how to access her bank account through her mobile phone, making deposits and transferring money on the spot. “I can do all my banking without having to leave my vegetable garden,” she says. Another person to benefit from the project is Mathew Simon, from Mendi in the Southern Highlands of PNG. Mathew earns a living by selling about 100 newspapers each day. Through the financial literacy training, Mathew learned how to open a bank account and save his newspaper earnings for the first time. He now enjoys the flexibility of being able to deposit small amounts of money. “I plan to start my own business when I have sufficient money. I am on the way.”

YOUR SAY:

To support fiscal and economic World Bank, and the Government “Business has reforms in Nauru, Samoa, Solomon of Australia, this was the country’s Islands, and Tonga, ADB provided largest infrastructure project doubled. We’re $18 million in loans and grants, since World War II. The road has able to comfortably with $26 million in cofinancing improved transport for 60,000 from the World Bank and the people, reducing the transit time support our four governments of Australia and from one end of the atoll to the New Zealand. other from 2–3 hours to less sons.” than 1 hour. Across the Pacific as ZELIA DOS SANTOS on an ADB a whole, ADB has successfully microfinance development project in INCLUSIVE SUPPORT supported the construction of over Timor-Leste. IMPROVES LIVES 850 km of roads in the past 5 years, ADB investments in the Pacific are improving access to markets and delivering results for the people of services for over 2 million people. the region. For instance, the South Meanwhile, ADB support for Tarawa road in the remote atoll microfinance has helped over nation of Kiribati was completed in 500,000 people in PNG gain access 2016. Jointly funded by ADB, the to financial services.

Fiji, Papua New Guinea, After gaining ADB opens its first Tonga, Solomon Islands, independence from regional office in the Kiribati, and the Cook France and the United Pacific, in Port Vila, Islands join ADB. Kingdom in 1980, Vanuatu. Vanuatu joins ADB.

25 1970s 1981 1984 THEN AND NOW

1967–1976 2007–2016 $62 M $2.55 B

TOTAL ADB LENDING,* PACIFIC * Loans, grants, and others.

ADB responded quickly to assist growth in the Pacific. It invested power generation from renewable poor Pacific communities affected in developing renewable energy, sources, expand grid networks, and by disasters in 2016. climate-proofing of critical rehabilitate solar power plants— infrastructure, and building reducing carbon dioxide emissions Cyclone Winston, the strongest more sustainable and resilient by about 2,510 tons per year. storm ever to make landfall in the communities. Southern Hemisphere, struck Fiji ADB also received approval from in February and killed 44 people. The urban population in the the GCF in December 2016 for In response, ADB mobilized an initial Pacific is rapidly growing, and ADB $17 million in grant financing for $2 million grant from the Asia-Pacific recognizes the need to improve a renewable energy program in Disaster Response Fund, which living conditions in the region’s urban the Pacific. Of this, $12 million is was disbursed within a week of the areas. ADB was able to help Fiji allocated to a renewable energy disaster. ADB followed this with a become the first beneficiary of the project in the Cook Islands and $50 million emergency assistance Green Climate Fund (GCF), with a $5 million will be used to build loan—with cofinancing of a similar $31 million grant approved. Together regional capacity on renewable amount from the World Bank— with financing from ADB and the energy. to help the government reconstruct European Investment Bank, the GCF schools and homes. ADB similarly grant will improve sustainable water provided emergency support for supply and sewerage services for COOPERATION FOR drought-affected areas in the more than 290,000 people in Suva, COMMUNICATION Marshall Islands. including informal settlers. ADB has Regional cooperation and also committed to improving water integration allows Pacific In the Cook Islands, ADB agreed to a supply and waste management countries to better address their $10 million contingent credit facility systems in Kiribati, Tonga, and common challenges of geographic that can be drawn upon to support Vanuatu. remoteness, small size, and widely short-term economic recovery, while dispersed populations. ensuring immediate humanitarian ADB continues to lead the shift to response and restoration of essential renewable energy in the Pacific. It ADB has worked closely with the services. This is the first time ADB is helping countries improve energy World Bank to improve telephone has ever provided a contingent credit security, transition to low-carbon and internet connectivity in the line anywhere in the world. economies, and expand energy region. A deepsea communications access. In the Cook Islands, Solomon cable connecting Tonga and Fiji Islands, and Tonga, ADB has was laid in 2013, halving internet A FOCUS ON CLEANER approved $7 million, supplemented costs and increasing broadband ENERGY by $10 million in cofinancing from speeds by more than 20 times. In 2016, ADB continued to promote the Global Environment Facility and ADB has approved funding to link environmentally sustainable Strategic Climate Fund, to increase Samoa and the North Pacific to

ADB cumulative The Federated States of lending to the Pacific Micronesia, the Marshall reaches $434 million. Islands, Nauru, and Tuvalu join ADB.

26 ADB AR 2016 1986 1990s high speed broadband, with further information and communication investments anticipated for the technology, fisheries, and managing Cook Islands, Nauru, and Kiribati. resource-rich economies. ADB increased its technical ISLANDS CONNECTED assistance to the Pacific in 2016, BENCHMARKING PACIFIC THROUGH KNOWLEDGE providing 31 grants totaling STATE-OWNED ENTERPRISES Sharing knowledge remains $30 million. At the regional level, Historically, weak governance and poor vital for the small and isolated ADB is supporting the Pacific regulatory frameworks make it difficult economies of the Pacific. In Island Forum Secretariat to for state-owned enterprises (SOEs) to 2016, ADB approved financing ensure a coordinated approach to operate on a strict commercial basis. In 2016, ADB assessed the performance of for the University of the South accessing climate finance, and is several SOEs in the Pacific, emphasizing Pacific (USP), the premier higher working with the Pacific Financial that political commitment to reform education institution in the region, Technical Assistance Centre of the needs to be a key driver for commercial to open a new campus in Solomon International Monetary Fund. results. The 10 participating countries Islands. This follows USP’s demonstrated a willingness to identify successful expansion in Kiribati, ADB also helped train ministry of and address core issues within their SOEs. The resulting publication was where an ADB-financed campus finance personnel from Timor- Leste and Samoa on economic Finding Balance 2016: Benchmarking the was opened in 2016. ADB also Performance of State-Owned Enterprises worked with USP to co-sponsor the analyses of investment projects. in Island Countries. annual Pacific Update Conference, held in Fiji in July. Attendees shared critical thinking on climate change and disaster resilience, migration and labor market developments, reform of state-owned enterprises, private sector development, 2016

Palau joins ADB ADB approves Extended ADB’s cumulative and is later classified as Missions in Samoa, lending to its a developing member Solomon Islands, Tonga, developing member country in 2005. and Vanuatu. countries in the Pacific reaches more than $3.6 billion. 27 2003 2015 SOUTH ASIA BANGLADESH, BHUTAN, INDIA, THE MALDIVES, NEPAL, SRI LANKA

Despite global headwinds, South Asia OPERATIONAL sustained its recent rapid economic HIGHLIGHTS growth in 2016, expanding by 6.6%. In 2016, ADB approved $4.4 billion in loans and grants covering India’s economy grew an estimated 30 projects in South Asia. Grants 7.1% to provide impetus for the for technical assistance reached wider region. Notwithstanding $54.1 million, of which $19.4 million the government’s decision in came from external funds. ADB November to remove high- awarded new project contracts denomination banknotes from valued at $3.57 billion, and disbursed circulation, thereby affecting cash $2.94 billion. It also raised $2.36 billion transactions, economic momentum in cofinancing for the region. is expected to remain robust. ADB supported the areas critical for Bangladesh saw gross domestic sustained and inclusive economic product grow 7.1%, propelled growth in South Asia. It directed its largely by increased consumption investments mainly to transport (40%), and revived exports. Bhutan’s energy (18%), finance (16%), and urban economy grew by 6.4%, supported services (10%). by strong results in the industrial and services sectors. In Sri Lanka, ADB invested in transport to promote economic growth tapered to regional connectivity and increase 4% due to weak agricultural and mobility in rural and urban areas of industrial performance. In June, the region. In June, ADB approved a the International Monetary Fund loan of $500 million to build India’s provided support to the country’s longest bridge across the Ganges River. ADB sought to expand energy access economic reform efforts. The The 9.8-kilometer (km) bridge will in South Asia and, in September, Maldives’ economy recovered slightly provide vital transport links between approved $200 million to support an to expand 3.4%, up from 2.8% in 2015, the northern and southern parts of energy services company, owned by the mainly due to boosts in construction Bihar as well as with neighboring Government of India, as the firm begins and tourism. In Nepal, growth of 0.8% Nepal, benefiting 9 million people. In to make investments in energy efficiency. reflected lost income and productive August, ADB approved $9.69 million In November, ADB approved a natural capacity caused by the lingering in assistance to the Maldives to gas project in Bangladesh valued at effects of the 2015 earthquakes, a construct a passenger and cargo $167 million to improve gas production second year of bad weather, and harbor on Kulhudhuffushi Island. efficiency and expand transmission. supply disruption from 6 months of The project aims to connect services, protests against specific provisions in markets, people, and harbors, with ADB sought to enhance South Asia’s the country’s new constitution. greater accessibility and affordability financial systems, approving an for 8,000 residents on the island and assistance package of $252 million South Asia needs to develop further 30,000 living nearby. In September, in October to develop Sri Lanka’s transport connections within ADB confirmed a $4.26 million road capital markets. and across countries, basic urban improvement project for Bhutan. infrastructure, and financial systems The project will enhance travel and To expand the coverage and quality that provide necessary funds for trade opportunities for approximately of basic urban services, in June, ADB businesses and households. 100,000 residents of Thimphu. approved a loan of $275 million for

India, Nepal, and Sri Lanka ADB support to the are among 31 founding region centers largely 50 YEARS OF ADB members of ADB. India on investments in IN SOUTH ASIA is the third biggest agriculture and natural shareholder, after Japan resources. and the United States.

28 ADB AR 2016 1966 1967–1986 FLOWER POWER SEES SHAHAN’S BUSINESS BLOSSOM

It was late afternoon and Shahan Ara was working hard to pluck all the flowers in her field in the Jessore district of southwestern Bangladesh. Shahan was aiming to send flowers to the market ahead of the national Independence Day celebration. In a country where subsistence farming is still common, Shahan Ara is a rarity. Rather than grow rice, she cultivates flowers—a high-value crop that is more complex to farm, but commands higher market prices. Shahan Ara’s shift from traditional farming to high-value cultivation was inspired by her participation in a crop diversification project run by the Government of Bangladesh. The project, financed through an ADB loan of $40 million, forms part of a broad national effort to expand agricultural productivity and increase farming incomes. Shahan Ara received training in floriculture and fertilizer and water management. She also received loans and opportunities to visit and learn from other flower farmers. Her business expanded significantly since her involvement with the crop diversification project, leading to a 150% increase in her income. Since 2012, the project has helped over 250,000 farmers—more than half of them women—to double their income. About 70,000 hectares of land are now devoted to diversified crop farming, and about 200,000 farmers have received more than $60,000 in loans to help make the transition from traditional crops. The project has introduced and promoted 35 high-value crops. In addition to improving the overall efficiency of farms, and linking them to markets, farmers learn specialized skills to cultivate the often delicate and temperamental high-value plants.

YOUR SAY: a water supply project in Dhaka, To improve access to markets Bangladesh. Through the project, and job opportunities for remote “With electricity, ADB will help rehabilitate distribution communities, ADB confirmed pipelines, with about 5,000 new and $300 million in April for a project in the children can regulated connections established Uttar Pradesh, one of India’s poorest in low-income communities. The states and home to about 200 study at night. This project aims to deliver 24-hour water million people, to upgrade 430 km will improve their supply to an additional 6.5 million of major district roads. In December, people by 2022. ADB also backed a South Asia opportunity in life.” Subregional Economic Cooperation (SASEC) project of $186.80 million to NACHU, an 82-year-old beneficiary of ADB BROADER AVENUES TO support to expand electrification in rural rehabilitate and upgrade about Bhutan INCLUSIVE GROWTH 160 km of Nepal’s road network. With inclusive growth as a priority, ADB projects in South Asia are In September, ADB approved helping to provide broader access $60 million in funding for local to sustainable power, potable water, governments in Sri Lanka to and quality education, while making provide safe drinking water in four travel easier between villages, towns, provinces for people troubled by and cities. chronic kidney disease.

Bhutan joins ADB, following ADB makes its first loan to India, a $100-million Bangladesh (1973) and Maldives lending facility to the Industrial Credit and Investment (1978). ADB’s first field office opens Corporation of India for onlending to private enterprises in Dhaka, Bangladesh. in the industrial sector. While India qualifies to apply for concessional loans, it does not do so to avoid crowding out existing beneficiaries of ADF loans.

29 1982 1986 THEN AND NOW

1967–1976 2007–2016 $368 M $42.47 B

TOTAL ADB LENDING,* SOUTH ASIA * Loans, grants, and others.

To assist households and businesses Sri Lanka, which will eventually deliver In June, SASEC countries adopted currently operating without reliable 300 megawatts of wind power into the program’s first comprehensive and sustainable power, ADB approved the country’s electricity grid. and long-term operational plan, $238 million in December for the Indian covering 2016–2025. Defining strategic state of Rajasthan’s renewable energy In November, ADB and the objectives and operational priorities, program, financing the construction of Government of India signed an the SASEC operational plan identified transmission lines and optical ground agreement to commit $200 million over 200 potential projects requiring wires to connect existing substations. to continue improvements in the more than $120 billion in development coverage and operation of sewerage, assistance over the next 5 years. ADB In Nepal, ADB approved its first drainage, and water supply services in also supported the development of a results-based loan of $120 million in Kolkata. The project will rehabilitate SASEC vision document to articulate November, supporting a development water supply to 31,800 households in the region’s long-term potential as an program for schools. The program aims Joka and adjoining areas, reduce integrated entity. to improve equitable access, quality, water wastage in East Kolkata’s 44,700 and governance in basic and secondary households, and connect at least In September, ADB approved education in the country’s 75 districts. 83,400 additional households to the $631 million in loans and grants for the sewerage and drainage network. Visakhapatnam–Chennai Industrial Corridor in India. As a holistic and COMMITTED TO A In Nepal, ADB continued to back a multisectoral approach to urban– GREENER SOUTH ASIA project to improve the Bagmati River industrial development, the corridor By 2020, ADB aims to have doubled its Basin’s environment, heritage sites, is expected to play a vital role not only support for environmentally sustainable and water quality. The project involves in unifying the large domestic market, growth in South Asia, including building a reservoir at the river’s source but also in integrating the Indian assistance for developing member to ensure minimum year-round water economy into global value chains and countries to tackle the impacts of flows, as well as providing river bank opening up trade opportunities with climate change. beautification. neighboring countries in South Asia. Of the total assistance, $500 million In September, ADB provided of a multitranche financing facility $505 million, guaranteed by the ADVANCING REGIONAL will support priority infrastructure Government of India, for the Punjab COOPERATION investments in the corridor. The second National Bank to finance solar rooftop Cooperation and integration among portion, a $125 million policy‑based systems on industrial and commercial countries in South Asia intensified loan, will support policy reforms buildings. The project aims to reduce in 2016. ADB approved $1.43 billion and institutional development in greenhouse gas emissions by about toward 9 projects, bringing cumulative the state of Andhra Pradesh. ADB 11 million tons of carbon dioxide SASEC investments to 46 projects, will also manage a $5 million grant over 25 years. ADB is also assisting a with ADB funding of about $5.6 billion from the multidonor Urban Climate green power development project in since 2001. Change Resilience Trust Fund to

ADB begins to expand ADB supports the creation of a investment into transport, new program to increase trade and energy, and urban economic cooperation within South development. Asia, the South Asia Subregional Economic Cooperation Program.

30 ADB AR 2016 1987 2001 build climate resilient infrastructure, states of Andhra Pradesh, Odisha, together with $1 million in technical Tamil Nadu, and West Bengal, as well assistance to help the government of as in Bangladesh and Sri Lanka. At Andhra Pradesh manage the corridor. these workshops, ADB outlined the Also in September, ADB approved concept, framework, and components LEARNING THE LESSONS $1.5 billion to support the Government of the economic corridor model, and OF DISASTER of Bangladesh in constructing the then presented the findings of the In October 2016, ADB and 102 km Dohazari–Cox’s Bazar section studies. the Government of Nepal, of the Chittagong–Cox’s Bazar under a $232 million project for railway corridor, and to strengthen In May, ADB launched the book emergency assistance, launched the reconstruction of schools the capacity of Bangladesh Railway. Scaling New Heights: Vizag–Chennai Industrial Corridor, India’s First destroyed by the 2015 earthquake. The railway will serve as an alternative Applying a “build back better” mode of transport for about 50% of Coastal Corridor, which provides approach, the project will deliver at bus trips—improving road safety and policymakers with an overview of the least 700 spacious schools that are reducing greenhouse gas emissions by strategic application of economic earthquake-resilient, environment- more than 10,500 tons in 1 year. corridor development principles. In friendly, and equipped for people December, ADB published Challenges with disabilities. Through the in Implementing Best Practices emergency assistance, ADB is in Involuntary Resettlement— helping Nepal return thousands of KNOWLEDGE SHARING children to school and restore vital FOR RESULTS A Case Study in Sri Lanka, covering government services for affected In 2016, ADB responded to calls by experiences in relocating people communities. South Asian countries for knowledge displaced by transport development work that will result in investments in the country’s south. In partnership to address ongoing development with Oxford University Press (India), challenges. ADB also copublished Bhutan: New Pathways to Growth, the first ADB initiated studies on economic publication to take an academic corridor development in the region, approach to analyzing Bhutan’s then held workshops in the Indian economic potential. 2016 ADB energy projects in India light up 850,000 households ADB’s cumulative lending with new electricity to developing member connections from 2010 to 2013. countries in South Asia totals $65.7 billion.

31 2010 SOUTHEAST ASIA BRUNEI DARUSSALAM, CAMBODIA, INDONESIA, THE LAO PEOPLE’S DEMOCRATIC REPUBLIC, MALAYSIA, MYANMAR, THE PHILIPPINES, SINGAPORE, THAILAND, VIET NAM

Economic activity in Southeast Committed to helping Indonesia Asia expanded in 2016 with mixed address the dual problems of prolonged results throughout the region. economic slowdown and rising Cambodia, Indonesia, the Lao People’s inequality in household incomes, ADB Democratic Republic (Lao PDR), approved (in June and November, Singapore and Thailand sustained respectively) two policy-based their growth momentum while growth programs, each worth $500 million. accelerated in the Philippines. The first program provides support for reforms to improve the country’s In the Philippines, upbeat investment climate. It aims to leverage investment, household spending, business regulatory reforms; open and the government’s commitment up service sectors to foreign direct to infrastructure development, investment; reduce nontariff trade accounted for exceptional economic barriers; strengthen the institutional, performance. This was supported by policy, and regulatory framework low inflation and robust remittances. for public–private partnerships Increased public investment and in infrastructure; and improve government stimulus for the rural transparency and competition in public economy lifted growth in Thailand. procurement. The second program For Indonesia—the biggest economy seeks to reduce income inequality by in Southeast Asia—robust consumer better aligning the public expenditure spending supported growth even as framework with the government’s investment slowed. Adverse weather sustainable development goals (SDGs) conditions affected growth potential, in education, health, infrastructure, particularly in the agriculture sector, in and social protection. The program Viet Nam and Myanmar. Uncertainties also supports SDGs specific to local on the country’s political transition government, through better targeted February, it approved an additional also limited growth in Myanmar. fiscal transfers and improved service loan of $400 million to expand the Meanwhile, sluggish global growth delivery performance. Philippines’ flagship conditional dampened prospects for Malaysia and cash transfer program. This program to a greater extent, Brunei Darussalam. In December, ADB approved provides regular health and education $250 million to help the Philippines grants to around 4.4 million of the streamline public expenditure and country’s poorest households. OPERATIONAL boost municipal revenue streams HIGHLIGHTS to provide better basic services and To improve transport routes, ADB is In 2016, ADB supported the people drive local economic development. In contributing $286 million to construct of Southeast Asia with $3.34 billion in Viet Nam, ADB approved a program of around 25 kilometers of expressway loans and grants and $26.28 million for $200 million to improve public financial between Ben Luc and Long Thanh, technical assistance. ADB focused its management systems and enable south of Ho Chi Minh City, a short support on public sector management the government to provide better link to the southern corridor of the (45%), education (16%), and transport infrastructure. Greater Mekong Subregion (GMS). (14%). It mobilized $2.82 billion in By 2020, the project aims to reduce official cofinancing for loans and ADB also supported projects and travel times and transport costs by 20%. grants, and $37.27 million for technical programs to improve access to Meanwhile, a $106 million road project assistance. education in Southeast Asia. In in Viet Nam—which will benefit about

ADB approves its first national technical assistance grant 50 YEARS OF ADB (Indonesia, 1967), its first loan IN SOUTHEAST ASIA (Thailand, 1968), and its first education project (Singapore, 1970).

32 ADB AR 2016 1967–1970 GREAT BENEFITS FROM GOOD GOVERNANCE Luningning Catibong, a 32-year-old mother of four, and her husband, Aga, are part of the Mangyan tribal community of Sablayan, in the Occidental Mindoro province of the Philippines. Luningning and Aga long dreamed that one day their children might have a local school to attend, making the perilous trek to the existing school a thing of the past. On 2 December 2012, the Inawa Panaynep (meaning “fulfilment of dreams”) Elementary School opened its doors to 144 Mangyan students. The school has a zero dropout rate, and the children achieve good grades using a customized curriculum that also preserves their cultural heritage. The opening of the school was part of a push by the Municipal Government of Sablayan. In 2011, the municipality earned the Seal of Good Housekeeping, qualifying it for subsidies from the Performance Challenge Fund to improve the standard of living in the area. The Performance Challenge Fund is one of many innovative and ongoing initiatives included in two ADB-supported governance reform programs. The main goal of the programs is to increase the efficiency and effectiveness of public services delivered by local governments in the Philippines. The programs give these local governments a larger share of tax revenue, and allow them to implement systems to report on finances and measure their performance. As a result of its strong financial management, the Municipal Government of Sablayan has since received enough funding to provide the community with a better access road, more clean water, and a maternity clinic. The incidence of respiratory illness has also been reduced.

YOUR SAY:

225,000 people in five provinces— and vocational education and training “With the good aims to bolster the flow of goods, project that includes a $4 million road, we can take travelers, and investment capital, stipend program for around 4,600 while exploring opportunities for poor and disadvantaged youth. In the products to markets agriculture and tourism. Philippines, ADB completed a Japan and sell at a Fund for Poverty Reduction grant project that built 60 modern and well- competitive price.” BROADENING ACCESS TO equipped kindergartens and delivered OPPORTUNITIES LAN LEN, a 51-year-old farmer from the quality early childhood education to Bavel district of Cambodia, on ADB support ADB again worked to improve basic more than 15,000 preschoolers in two to reconstruct flood-damaged roads. services for the disadvantaged of of the country’s poorest regions. Southeast Asia. ADB will help expand the health In Viet Nam, ADB designed a system in the Lao PDR through a secondary education program to Japan Fund for Poverty Reduction expand access to school for about grant that will finance health equity 1.2 million migrant youth and 2,000 funds for the poor, and provide young people with disabilities. In the free access to maternal and child Lao PDR, ADB approved a technical health care.

With the majority of Southeast Asia’s ADB support helps extend water and sanitation people still living off the land, ADB coverage across Southeast Asia, including improved directs significant support to agriculture. water access for 1.5 million people in Manila. ADB It also supports power projects investments also help improve medical care and benefitting over 50 million people in referral services for more than half of Myanmar’s Indonesia, the Philippines, and Thailand. population.

33 EARLY 1970S 1980s THEN AND NOW

1967–1976 2007–2016 $1.75 B $37.75 B

TOTAL ADB LENDING,* SOUTHEAST ASIA * Loans, grants, and others.

With clean and potable water still In September, ADB approved a During the first half of 2016, ADB an issue in many parts of Southeast $109 million flood management commissioned a study on expanding Asia, ADB approved $60 million project in Indonesia, including soil the network of economic corridors for the Philippines to increase and water conservation programs to connect all GMS capitals, major access to safe drinking water for an to reduce soil erosion and sediment economic centers, and key ports. extra 200,000 people and improve transfer. ADB also approved a grant The study was endorsed by the sanitation for another 400,000 to address deforestation and forest GMS leaders in December. ADB also people outside Metro Manila. In degradation in West Kalimantan. In helped initiate and prioritize projects Cambodia, ADB approved additional addition, ADB approved a technical to develop a railway network in the financing of $15 million to support assistance project to pilot a carbon GMS. With the launch in December government efforts to achieve capture and storage (CCS) project of permits that open up cross-border universal supply of domestic-quality in Indonesia, the first CCS project road transport in the GMS, ADB has water in rural areas and provide in Southeast Asia, providing a enhanced the movement of people, modern sanitation nationwide. foundation for CCS to reduce the vehicles, and goods in the subregion. region’s greenhouse gas emissions. A more mobile population, increasing MORE ENVIRONMENTAL In November, ADB approved trade, and intensified interaction ISSUES ADDRESSED a project to rehabilitate critical between people and animals all During 2016, ADB made substantial irrigation infrastructure to cope with heighten the risk of spreading strides in fostering environmental the impacts of climate change in communicable diseases across GMS sustainability in Southeast Asia. Myanmar’s central Dry Zone. borders. In November, ADB approved $132.5 million for Cambodia, the In March, ADB approved a loan of Lao PDR, Myanmar, and Viet Nam to $123 million to help the Philippines COUNTRIES COOPERATE cooperate and exchange information reduce environmental degradation TO MOVE FORWARD on communicable diseases, in Metro Manila and address In 2016, ADB provided $518 million— improve disease surveillance and the city’s vulnerability to natural and leveraged an additional outbreak response, and improve the disasters. During the first half of $614 million in cofinancing—for capacity of laboratories to diagnose 2016, ADB helped conduct a regional cooperation and integration communicable diseases accurately. drought analysis for Cambodia, the in Southeast Asia. This was supported Lao PDR, and Viet Nam. ADB is also by $8.5 million for technical assistance ADB also supported the preparation assisting Viet Nam in developing projects. The support aims to of action plans for new Green City a national water accounting strengthen integration, promoting Initiatives for Medan and Batam system based on remote sensing the ASEAN Economic Community in Indonesia, under the Indonesia- of variables, such as rainfall, in a within individual countries and across Malaysia-Thailand Growth Triangle number of river basins. Southeast Asia as a whole. Program.

Transport connectivity is a top development ADB supports the launch of priority in Southeast Asia, particularly in the Greater Mekong Subregion the landlocked Lao People’s Democratic Program, helping fund priority Republic, where projects like the Xieng infrastructure projects worth Khouang road help boost per capita income $11 billion. by 40% and cut poverty by 40%.

34 ADB AR 2016 1990s 1992 ADB CENTRALIZES ADB is supporting the marketing, KNOWLEDGE SHARING advertising, and customer service In January, ADB launched an development of the Ha Noi Metro innovative technical assistance rail system to enhance patronage, program titled “Knowledge generate additional revenue, and Development Support for Southeast ensure the system’s sustainability. LIGHTING THE WAY FOR Asia.” Through the program, ADB The program’s regional knowledge MYANMAR’S DEVELOPMENT has facilitated quick and effective In October, ADB began a technical responses to the knowledge initiatives include studies on logistics assistance project to help construct requirements of its developing and special economic zones in the 12 mini-grid solar power systems member countries, while reducing GMS. In collaboration with leading in remote villages of Myanmar, administrative costs. The program private sector representatives, ADB where access to modern energy is currently supporting five country- helped provide GMS nations with services was lacking. The project is improving livelihoods and promoting based knowledge initiatives and seven a set of policy recommendations to develop special economic zones environmentally sustainable energy regional knowledge initiatives. across the country. It has also further and, ultimately, strengthen established community-based Among the program’s country-based the competitiveness of the GMS organizations called village energy initiatives, ADB is providing policy economic corridors. committees. The initiative will help support to the new Government of formulate guidelines, standards, the Philippines. ADB helped prepare Outside the technical assistance and regulations for future off-grid thematic studies that framed long- program, ADB produced a series of renewable energy projects in Myanmar. term strategies in the Philippines’ nine reports that recommended a key development areas of health, range of transport policy reforms and education, employment, infrastructure, initiatives for Myanmar. Presented to environment, and governance. It is Myanmar’s new government in April, also helping to finalize knowledge the reports have helped promote products for the government’s long- dialogue and identify opportunities term development vision. In Viet Nam, for sustainable transport projects. 2016 ADB helps finance After Typhoon Yolanda ADB’s cumulative lending the construction of (Haiyan) devastates the to developing member 100 lower secondary Philippines, ADB swiftly schools benefitting delivers major assistance countries in Southeast Asia 32,000 students in to restore livelihoods and totals more than $75 billion. Cambodia. reconstruct infrastructure.

35 Early 2000s 2013 DEVELOPING THE PRIVATE SECTOR

The private sector is the single most powerful catalyst for creating employment and generating economic growth. It is critical to achieving the globally agreed goals of ending absolute poverty and allowing all human beings to fulfill their potential. ADB intends to have private sector support become 50% of its annual approvals by 2020. In 2016, ADB continued to help its developing member countries (DMCs) improve their business environments and foster competitiveness in the private sector. To generate private investment to fund development needs, ADB further advocated, promoted, and invested in public– private partnerships (PPPs). It also directly provided finance to privately developed infrastructure projects, financial intermediaries, and other priority areas. ADB approvals of private sector operations in 2016 were slightly lower than the record levels achieved in 2015. ADB approved private sector financing of $2.5 billion and generated $5.84 billion in cofinancing, which increased by almost $1.2 billion compared to 2015. This includes a record $238 million in official cofinancing to support nonsovereign operations.

SUPPORTING BUSINESS ACROSS ASIA AND THE PACIFIC Boosting Private Participation in Key Projects ADB’s Office of Public–Private Partnership (OPPP) continued to show strong progress in its second full year of operations. In 2016, OPPP was successful in securing five new transaction advisory mandates in Bangladesh, Kazakhstan, Malaysia, Sri Lanka, and Viet Nam. In addition to delivering much needed transport, energy, and healthcare infrastructure, these mandates are expected to strengthen the capacity of agencies involved, and create a template for future PPPs in individual countries and sectors.

Sovereign support from ADB lending to ADB indirectly helps private enterprise 50 YEARS OF ADB IN stimulate the private sector through development THE PRIVATE SECTOR in ADB developing member finance institutions countries (DMCs). begins.

36 ADB AR 2016 1966–1970s 1975 YOUR SAY: “We now have a bank that is serving Afghanistan in difficult times. It has allowed businesses to create more jobs and income.” BERND LEIDNER, chair of Afghan Credit Guarantee Foundation, which provides loan guarantees to the ADB-supported Afghanistan International Bank for SMEs.

In Sri Lanka, OPPP is advising the capacity building and policy In East Asia, ADB approved a loan Sri Lanka Ports Authority on a PPP reform, and project monitoring or of $50 million to help the Yichang structure for a new $500 million restructuring support. municipal government in the People’s container terminal for an additional Republic of China (PRC) design and 2.4 million 20-foot equivalent units Under AP3F, technical assistance implement a PPP for elderly care at the port in Colombo, making it to Bangladesh involves providing services. This is ADB’s first sovereign a major hub for global shipping. In legal support to prepare the Dhaka results-based loan to help local Malaysia, OPPP is advising Melaka Bypass project, and will generate governments undertake PPPs that Green Technology—a state-owned templates and guidelines that deliver social services. The total cost enterprise (SOE)—on a project to benefit other road PPP projects in of the project is $128.4 million, with refurbish over 100,000 road lights the country. Technical assistance the Yichang municipal government using energy-efficient diode lamps, to Timor-Leste will provide contributing $55 million and the supporting Malaysia’s drive to cut engineering resources to the PPP private sector expected to contribute its greenhouse gas emissions by and Loans Unit of the Ministry $23.4 million. 40% by 2020. OPPP is also advising of Finance, helping ensure that the Ministry of Health and Social their PPP projects meet quality In the Pacific, ADB continued to Development of Kazakhstan to standards. Technical assistance support privatization and PPP build, equip, and maintain a 300-bed to Myanmar will help restructure transactions through the Private multifunctional teaching hospital existing road concessions suffering Sector Development Initiative. ADB at the Karaganda State Medical from financial distress, lack of successfully concluded a concession University. investment, or poor performance. contract for Tonga Forest Products and developed privatization strategies In May 2016, ADB expanded the ADB regional departments also for three SOEs in Samoa. In addition scope of its transaction advisory worked to accelerate the adoption to helping Fiji develop a PPP policy services to serve private sector of the PPP modality across Asia and and transaction pipeline, ADB is sponsors on a pilot basis. This the Pacific. providing technical assistance for advisory service was created to help the privatization of the Fiji Electricity In Central and West Asia, ADB private sector investors structure Authority and Airports Fiji. In Timor- successfully completed the bankable transactions and raise Leste, ADB developed a PPP strategy transaction advisory mandate for financing for complex and innovative for solid waste management in Dili, the 1,600-kilometer Turkmenistan- projects that accelerate the delivery and is working with the country’s Afghanistan-Pakistan-India natural of critical infrastructure. PPP unit to finalize regulations and gas pipeline project. As transaction establish a transaction pipeline. In The Asia Pacific Project Preparation advisor, ADB helped establish the Papua New Guinea (PNG), ADB Facility (AP3F), managed by OPPP, project company and facilitated is helping PNG Power develop and officially launched operations after agreement among the parties on tender solar generation PPP contracts obtaining approval from its donor their shareholding percentages and in off-grid rural centers. countries: Australia, Canada, and the deployment of their own funds Japan. To generate awareness for to finance detailed engineering In South Asia, ADB provided capacity the resources available under AP3F, and route surveys, environmental and framework support that resulted ADB conducted outreach efforts in and social safeguard studies, in Nepal establishing a PPP center 25 DMCs. It approved a total of six and procurement and financing in 2016. In Sri Lanka, ADB approved applications for technical assistance activities in the project’s next phase. technical assistance, financed by the from Bangladesh, Indonesia, In Pakistan, ADB is helping the Clean Energy Fund, that will help the Kazakhstan, Myanmar, and Timor- government implement a program Ceylon Electricity Board develop wind Leste. AP3F will provide technical to support PPP investments in Sindh parks and attract private investment Province. assistance for project preparation, in wind power generation. ADB also 37 THEN AND NOW

1983 2015 $3.0 M $2.5 B

ADB NONSOVEREIGN INVESTMENTS, ASIA AND THE PACIFIC

provided project financing support for term financing for micro, small, and assistance to enhance the capacity PPPs including eight energy projects medium-sized enterprises (MSMEs), and expand the size of the country’s in India and Bangladesh through with 40% of financing earmarked for capital markets. The program aims intermediaries, four through the India MSMEs run by women. to transform the Colombo Stock Infrastructure Finance Company Exchange into a stock corporation and four through the Infrastructure In the Kyrgyz Republic, ADB with modern governance practices, Development Company. In Southeast approved a program to improve and help the government list shares Asia, ADB provided technical access to finance, foster private in SOEs. assistance to Cambodia to establish sector participation in infrastructure, a legal and institutional framework encourage diversified exports and In Bhutan, ADB is providing technical for the development of PPPs. ADB foreign direct investment, increase assistance of $1.5 million to help the helped develop a PPP project pipeline, government transparency through government address gender equality including conducting a feasibility e-procurement, and reduce the tax- issues, while improving access to job study for one pilot project, as well related costs of doing business. opportunities and social services as building institutional capacity in by the poor in selected urban and government ministries, and reviewing In Bangladesh, ADB approved a rural areas. the country’s legal and regulatory second project to support small and environment. medium-sized enterprises (SMEs) in For India, ADB approved a policy- the country’s rural areas. This includes based loan of $126 million to enhance Improving Business Conditions, technical assistance to be funded by business conditions in the state of Country by Country the Japan Fund for Poverty Reduction. Andhra Pradesh, aiming to improve In Uzbekistan, ADB is supporting The project includes a financial the planning of industry centers a finance project of $100 million to intermediary loan of $200 million and encourage good practices for enable small enterprises to access for onlending to SMEs outside managing economic corridors. funding for working capital and fixed- the metropolitan areas of Dhaka asset investments. In Georgia, ADB and Chittagong, with $20 million In Indonesia, ADB has backed a approved $100 million for a program earmarked for SMEs owned by program that helps the government to help the government better women. The assistance will also help invest in climate reforms, PPPs, and manage its debt, fiscal risk, revenue, establish business incubation facilities public procurement reforms. In 2016, and public expenditure. The program around the country. ADB conducted a survey on the ease will help generate domestic savings of doing business in five major cities and attract private investment, while In Sri Lanka, ADB approved a total across Indonesia. The survey will providing broader access to long- of $252 million in loans and technical determine whether the government’s

ADB introduces nonsovereign ADB approves its first ADB introduces B-loans operations to further support loan and first guarantee to mobilize financing from the economies of its DMCs. to private companies, private sources and foster Nonsovereign approvals reach and creates a dedicated investments in DMCs. $3 million for the year. Private Sector Division. Nonsovereign approvals reach $163 million by 1990.

38 ADB AR 2016 1983 1986 1987 ADB SPARKS INVESTMENT IN CAMBODIAN SOLAR

Ever since Cambodia emerged from an era of conflict, ADB has been helping the country transition to a market-oriented economy driven by inclusive and sustainable growth. Annual growth rates in recent years have exceeded 7%, and poverty (defined by those living on less than $1.90 a day) has plummeted from 47.8% in 2007 to 13.5% in 2014. Despite this rapid economic development, the legacy of the civil conflict that devastated Cambodia’s national infrastructure remains. While access to electricity in the country rose from 20.3% of the population in 2007 to 55% of the population in 2015, the rate is still among the lowest in Southeast Asia. ADB is helping address this issue by driving private investment in solar power. While solar power has great potential in Cambodia, it contributes less than 0.1% to the country’s energy mix and is not used at utility scale. However, with recent technological advances, utility-scale solar plants can now operate at production costs that compete with traditional energy sources. To embrace these opportunities, the Government of Cambodia competitively selected the Sunseap Group to install a solar plant with enough capacity to power around 15,000 homes. In December 2015, ADB approved a loan of $9.85 million to Sunseap and a local partner. In addition to $3.6 million from ADB resources, the loan mobilizes $3 million of cofinancing from an international commercial bank and $3.25 million from the Canadian Climate Fund for the Private Sector in Asia, under the Clean Energy Financing Partnership Facility administered by ADB.

current economic package is having a entrepreneurs. In Cambodia, ADB Democratic Republic (Lao PDR), ADB positive impact and identify possible has supported the conversion of an is strengthening the capacity of the further policy reforms. offline ‘lenders club’ into an online Lao National Chamber of Commerce peer-to-peer marketplace lending and Industry and the Lao Business To foster innovation and private platform that provides short-term Women’s Association to advocate sector development in the Greater working capital to about 300 SMEs. more effectively on key private sector Mekong Subregion, ADB, together In Viet Nam, ADB helped launch the development policies, including the with the Government of Australia, is Saigon Innovation Hub in Ho Chi country’s investment promotion law. providing $10.5 million in technical Minh City, and expand the Da Nang assistance under the Mekong Business Incubator. These innovative Business Initiative. ADB has partnered business support services leveraged FINANCIAL SUPPORT with an impact investment fund and private sector expertise and funding TO SHARE PROSPERITY international investor syndicates to to help over 300 startups in 2016. In In 2016, ADB approved 26 private launch the Mekong Angel Investment Myanmar, ADB helped bring together sector operations. Of these, 12 have Network. The network has invested the government and private enterprise climate change and/or clean energy in startups and is conducting ongoing to work together on developing aspects, and 11 are located in low- due diligence on about $3 million the country’s first-ever private income or lower-middle-income worth of investments, while mentoring sector development framework countries. ADB made eight investments about 275 local angel investors and and action plan. In the Lao People’s to develop inclusive business, while

ADB establishes a dedicated unit to support ADB approves a strategy emphasizing its regional departments in establishing private the importance of capital markets and sector projects, and to advise governments infrastructure development, as well as on public-private partnerships and the providing advice to DMCs to improve privatization of state-owned enterprises. their business environments.

39 1992 1995 $6 B GENERATED IN COMMERCIAL COFINACING IN 2016

six projects included gender equality Both ADB loans have a focus on Pacific. The investment will help elements. expanding access to finance in India’s the client gain accreditation as a poorer states. ratings agency for the Indian market Supporting Agriculture and expand its ratings, advisory, and ADB’s Agribusiness Investment Team, In Pakistan, ADB approved a loan impact assessment services into created in 2015, ramped up its activity of $20 million to Khushhali Bank other Asian markets. in 2016. In June, ADB approved a Limited (KBL) to broaden the direct loan of $62.5 million, with reach of agricultural finance and Financing Trade Beyond Borders a B-loan for the same amount, to expand the institution’s support for Through its Trade Finance support dairy farming and milk safety MSMEs. The loan will also help KBL Program (TFP), ADB helps close in rural areas of the PRC. The project increase the proportion of women- market gaps for trade finance by will increase raw milk safety treatment owned MSMEs receiving financial providing banks with guarantees from 220,000 tons to 500,000 tons support, establish an SME training and loans to support cross-border per year and build biogas plants to academy, and strengthen its risk trade. An ADB study, Trade Finance process manure into organic fertilizer, management systems. Gaps, Growth, and Jobs was released reducing greenhouse gas emissions by In Bangladesh, ADB approved a loan in September and identified a global 66,000 tons each year. In December, of $20 million to Eastern Bank to market gap for trade finance of ADB approved a loan of $20 million support socially and environmentally $1.6 trillion, of which $692 billion was to Agripacific Holdings and Kunming sustainable investments in the needed in developing Asia. Lower- Hasfarm Flowers to support the garment industry. ADB is helping to income countries and SMEs tended livelihoods of farmers in the PRC, ensure that textiles and garments to have the highest market gaps and Indonesia, and Viet Nam. This project comply with recently enhanced fire unmet demand. In 2016, the TFP will foster regional integration by and safety standards, and to increase supported 2,079 transactions valued strengthening regional markets and the energy efficiency of production at over $3 billion (of which $1.8 billion cross-border trade, investment, and facilities. was cofinanced by banks, private technology transfer. insurers, an export credit agency, and ADB approved an investment International Enterprise Singapore). Nurturing Small Business of $20 million in the Vietnam Of the total transactions, 1,597 In June, ADB confirmed a $150 million Investments Fund III. The fund will supported SMEs and 368 supported investment in debt securities for invest in middle-market companies in trade between DMCs. Among the Janalakshmi Financial Services to Viet Nam, Myanmar, and across the 20 countries covered by the TFP, help expand access to finance by wider Mekong subregion. Through the 6 most active were Armenia, microenterprises in India, with a the fund, ADB is supporting health Bangladesh, Mongolia, Pakistan, special focus on businesses owned care, education, manufacturing, Sri Lanka, and Viet Nam. by women. ADB also approved a loan transportation, and logistics in of $200 million to IndusInd Bank to Southeast Asia, with a focus on During 2016, the TFP expanded into double the size of the bank’s inclusive increasing the employment of the Pacific for the first time, signing finance business by providing loans women. trade finance agreements with two to individuals or micro enterprises. Samoan banks and one bank in The investment will be complemented With an equity investment of Vanuatu. It also expanded operations with technical assistance to support $1.5 million in Micro Credit Ratings in Bangladesh, Kazakhstan, Myanmar, financial literacy for women, improve International, ADB is also supporting Uzbekistan, and Viet Nam, partnering digital loan processing, and introduce the development of microfinance with 11 new banks. The TFP new financially inclusive products. institutions across Asia and the conducted training and capacity-

40 ADB AR 2016 building seminars in Cambodia, In December, ADB confirmed and will create 7,000 jobs during Mongolia, and Myanmar. It also $109 million to develop geothermal construction. held regional training in Uzbekistan, steam resources in the South drawing 36 banks from 7 Central Asian Solok Regency of West Sumatra In the PRC, ADB approved a direct loan countries. in Indonesia. The loan comprised of $150 million and a complementary $70 million from ADB’s ordinary loan to be funded by commercial banks In 2016, ADB continued to implement capital resources, $20 million from of $100 million to expand wastewater its Supply Chain Finance Program LEAP, and a $19.5 million loan from management and help reduce pollution (SCFP). The SCFP complements the the Clean Technology Fund. Through in lakes and rivers. The project will help TFP by supporting domestic supply the project, ADB aims to help treat 2.3 million tons of wastewater and chains as well as cross-border trade. Indonesia reach its target of gaining 2,900 tons of sludge every day. In 2016, the SCFP supported more a 24% share of global geothermal In Myanmar, ADB approved a loan of than 188 transactions valued at over energy generation. $203 million, with 50% of funding $50 million to Irrawaddy Towers Asset cofinanced by partner financial In Thailand, ADB approved Holding and Irrawaddy Green Towers institutions. All SCFP transactions in assistance for two innovative to increase the penetration of mobile 2016 supported SMEs. solar power projects, with loans telecommunications. ADB also approved of $47 million and $45 million to a loan of $35 million and a political risk The Microfinance Risk Participation Stumpf Energy and Thai-Sunseap guarantee of $15 million to support and Guarantee Program facilitates Asset Company, respectively. Each urban renewal in Yangon. Through the local currency lending to microfinance company will install 100 megawatts project, which benefits from a B-loan institutions across DMCs. It expands of solar energy capacity on the of $5 million, ADB will help develop access to finance for businesses rooftops of commercial and industrial environmentally sustainable tourism and and people at the bottom of the buildings, providing competitively commercial real estate. commercial pyramid. The program priced electricity without relying on partners with local and international the support of feed-in tariffs. When banks to share the risk of loan fully operational, the two projects defaults. Since 2010, it has supported combined will reduce greenhouseNO gas more than $420 million in loans to UGUST emissions by 120,000 tons every201 year. ADB BRIEFS more than 2.4 million poor borrowers, with cofinancing of over $220 million. In Indonesia, ADB approved a 2016 TRaDE FINaNCE GaPS,

In 2016, Citibank joined the program $5 million equity investment in GROwTh, aND JObS SURvEY1 as a new regional partner. The Fluidic. Through this investment,

program is active in Bangladesh, India, ADB will contribute to the and Indonesia, and is planned to production and deployment of

expand to Sri Lanka and Myanmar in 500 megawatt-hours of energy 10 TRADEADB I stitut FINANCEsian D v l p entSURVEY B nk LAUDED the coming year. storage for isolated rural areas with ADB’s Trade Finance Gap Survey was the no access or poor access to the INT ODUCTION Attracting Greater Investment • Woman o firstT e adeto naquantify ce eco y t m s in thromarket gh a e odgaps of chan forNew ypestrade of finance electricity grid. These energy storageher o d r n g k , r g g h l r s , d andhe the e d to impact pan ccess s on a and medigrowth m siz d en and erpr se ( jobs. M s) s w The y In 2016, ADB significantly expanded solutions allow expensive and 1 a o r p y a m i s of cred av i ab e and f wer cor es onde t la ions c n e ed its ability to engage in private sector unfa survey is frequently cited by the World Trade polluting generators to be replacedupta However or some regions nd clien segments eject on rates emai d h gh and ta e p Organizationthrough 2015 Th s s of pa and icular co cwas r in t dayawarded s e vi o m nt of 2016’s ow tr de g w Best infrastructure projects in various by renewable energy sources such and lo com o y p ic s M rchandis r de vo umes el by 3% i 20 5 c mm y Dataprices elland by 30% Research nd yet gaps are no c Product s Without the u by derly Trade pport of t Finance d stages of development. It established n , a as wind turbines or solar systems. Global. the Leading Asia’s Private Sector In December, ADB also approved

Infrastructure Fund (LEAP), seeded $400 million to help meet Indonesia’s with $1.5 billion from the Japan rapidly expanding demand for gas. International Cooperation Agency. The Tangguh natural gas liquefaction

ADB manages LEAP, which uses Th AD facility, in the Papua Barat Province,S ey s a financial products ranging from debt D pa m is enabling the switch from coal and and equity to mezzanine finance. diesel-based energy production, 2016

ADB’s private sector Private sector ADB’s Midterm Review of investments reach approvals reach Strategy 2020 sets a target $2.5 billion, with $1.6 billion. for private sector support to be 50% of annual approvals $5.8 billion in cofinancing, by 2020. contributing more than a quarter of ADB’s annual investment in 2016. 41 2010 2014 DELIVERING AN EFFECTIVE ORGANIZATION

POLICY AND STRATEGY OVERVIEW ADB continues to implement a comprehensive agenda of operational and organizational reforms under its Midterm Review Action Plan. The plan details 192 actions to strengthen ADB’s operational efficiency and effectiveness, improve internal capacity, respond to the challenging development environment, and sharpen ADB’s strategic focus. Implementation is on track. As of December 2016, of the 192 actions, 147 actions have been fully implemented, 25 are largely implemented, and 14 actions have been partly implemented. Only 6 actions have not yet been implemented. Most of the time-bound actions are expected to be completed within 2017. In 2016, ADB worked to simplify its documentation and review protocols, and streamline approval processes. Measures to improve disbursement performance resulted in one of the highest recorded disbursement levels for ADB in recent years, reaching $12.26 billion in 2016. Building on a 10-point procurement reform action plan, ADB has started to implement the second phase of its procurement reforms to increase procurement efficiency and the quality of consultants and contractors. The reforms will further simplify procurement procedures with greater flexibility, faster procurement times, and the use of new and advanced technologies in project design and implementation. ADB also continued to enhance development effectiveness by increasing project readiness and improving project management. In December, ADB approved the revision of its Anticorruption Policy to respond to global developments and enhance measures for addressing tax secrecy, tax evasion, and legal forms of aggressive tax planning at both the country and project levels. ADB has been fine-tuning its lending facilities in response to the new needs and demands of its developing member countries (DMCs). In 2016, it reviewed its Countercyclical Support Facility (CSF). The facility was originally launched in 2009 as a short- term instrument to provide financial assistance to governments in the aftermath of the global financial crisis of 2008–2009.

The first Board of ADB’s annual Directors meeting is lending reaches 50 YEARS OF THE ASIAN held on 17 December, the $1 billion mark DEVELOPMENT BANK 2 days before ADB for first time. formally opens.

42 ADB AR 2016 1966 1978 ADB has been fine-tuning its lending facilities in response to the new needs and demands of its developing member countries.

The CSF was approved as a permanent increased, reaching the 2016 target SDGs is being customized to country- lending instrument in 2011. In July 2016, of 40%. Most of the ambitious specific conditions, in line with the ADB further refined the instrument and development finance targets were development plans and priorities of clarified its eligibility criteria. met, including direct value-added individual DMCs. cofinancing, project development ADB has started the process of transactions for public–private Ensuring Country Safeguards modernizing and transforming its partnerships (PPPs), and PPP Country safeguard systems refer existing information technology leveraging. However, the 2016 DEfR to the laws, regulations, rules, (IT) systems. New technology will identified challenges relating to delays and procedures in the policy deliver integrated operations, with in starting up operations, rising but areas of environment, involuntary financial and knowledge platforms still low levels of sustainability in resettlement, and indigenous that are supported by cloud services completed operations, and a lack of peoples, and their implementing for better reporting capabilities and progress in promoting women to ADB institutions. In 2016, as required more mobile support services. Several international staff positions. ADB is by its Safeguard Policy Statement, IT reforms were initiated throughout addressing these issues. ADB assessed all projects for their 2016 to improve ADB’s disbursements, impact on the environment and their institutional procurement, treasury Meeting a New Global Agenda social risks. ADB took appropriate operations, nonsovereign operations, ADB has renewed its commitment actions to reduce any impacts that and human resources management with United Nations partners for were identified. In May, ADB forged systems. regular Sustainable Development a partnership agreement with the Goals (SDGs) reporting and shared World Bank and bilateral agencies policy analysis of SDG implementation in the region to strengthen the ENSURING ADB’S in Asia and the Pacific. ADB is policies and capabilities of DMCs to EFFECTIVENESS also closely collaborating with address impacts on the ground. ADB other multilateral development conducted advanced workshops Managing for Results banks (MDBs) to expand financing on biodiversity, indigenous peoples, ADB uses a corporate results opportunities in areas such as climate environmental management, and framework with an annual performance finance, and reporting on private safeguard supervision for staff, scorecard to measure and manage its financing catalyzed by MDBs. consultants, government officials, and performance. The corporate results financial intermediaries. To encourage framework tracks the development ADB has initiated work on a new South–South knowledge exchange progress of the region, ADB’s corporate strategy, Strategy 2030, to on good practices in safeguards, contributions to country outcomes, respond to new global development ADB also organized conferences and its operational and institutional agendas. At the same time, a review of on subregional country safeguard effectiveness. Every year, ADB the ADB results framework is exploring systems in Tbilisi, Georgia and in publishes the scorecard in its annual ways to align ADB performance Ho Chi Minh City, Viet Nam. In May, Development Effectiveness Review indicators with SDG outcomes that ADB launched the first in a series of (DEfR). The 2016 DEfR report assesses are relevant to Asia and the Pacific three distance learning modules on ADB’s performance from 2013-2016. and ADB’s strategic directions. The safeguards. enhanced financing capacity, made The 2016 DEfR showed that ADB’s possible by the merger of the Asian Issue Resolution efforts and reforms are working and Development Fund (ADF) with The ADB Accountability Mechanism performance is improving. The success ordinary capital resources (OCR), is an independent forum for people rates of completed sovereign ADB effective January 2017, allows ADB adversely affected by ADB-assisted operations improved considerably to respond to strong DMC demand projects to voice complaints and compared with 2013, while gender to support the SDGs and combat seek solutions to their problems. equality results targets were met. The climate change. At the operational The Accountability Mechanism is procurement readiness of operations level, ADB lending support for the used as a last resort to resolve such 43 THEN AND NOW

1966 2016 40 3,092

TOTAL NUMBER OF ADB STAFF

issues. This is done through the Disclosure and Transparency DEVELOPING AGILITY AND special project facilitator (SPF), which ADB continues to be one of LEADERSHIP handles problem solving, and the the top performers in the Aid Compliance Review Panel (CRP), Transparency Index published by Human Resources Management which handles policy and compliance the nongovernment organization, In 2016, ADB posted 572 job vacancies, issues. The mechanism is designed Publish What You Fund. In the 2016 which generated 49,340 applications to contribute to ADB’s development index, ADB scored 84.9%, compared from nationals of 65 of ADB’s effectiveness and improve project with 83.8% in 2014. 67 member countries, highlighting quality. the strong demand to work at ADB. A new ADB disclosure management Meanwhile, ADB’s secondment In 2016, the Accountability system was launched in May to program hosted 34 secondees, and Mechanism received nine complaints: simplify the submission of project 25 graduate students entered the six from Georgia; and one each from documents for disclosure. Training internship program. India, Pakistan, and Samoa. The of ADB staff and improvements details and status of each complaint to the information request tracking ADB enhanced its recruitment scope are available on the ADB website, adb. system continued during the year to attract a wider talent pool and org. The CRP monitored remedial to improve implementation of the refined its human resources processes, actions for projects in Cambodia, Public Communications Policy putting more focus on transparency, India, and the Philippines, while the (PCP). The PCP governs the release quality, and diversity. This process SPF conducted 12 training sessions on of ADB information and the way included the strengthening of complaint handling in 5 DMCs. ADB communicates with external protocols for talent management stakeholders. More than 4,000 and skills acquisition, allowing ADB hosted the 13th Annual Meeting documents and reports—including ADB to respond more adeptly and of Independent Accountability project, institutional, and evaluation comprehensively to the changing Mechanisms and a civil society documents—were uploaded in occupational structure and skills organization forum to build better 2016. ADB received 3,028 official mix required within an efficient partnerships. The first report on requests for documents and development organization. ADB also implementation of the Accountability 95% of requests were responded introduced new actions for gender Mechanism was jointly prepared and to within 20 days. In July, ADB equality, including targets for women’s released by the CRP, the SPF, the began a review of the PCP to assess representation by 2022. These changes Independent Evaluation Department, policy implementation and maintain are designed to enhance career and the Sustainable Development and a high standard of disclosure progression for capable, motivated, Climate Change Department. practices. and well-performing ADB staff.

ADB approves a landmark ADB launches the first issue of gender policy to ensure that Asian Development Outlook, an women’s needs and roles are annual publication series on the considered in lending and region’s economic performance and operations. prospects.

44 ADB AR 2016 1985 1989 In 2016, ADB implemented an Early ADB complemented these programs These learning programs benefited Separation Program as part of efforts with the managerial Assessment 900 ADB staff members (687 from to rebalance workloads and address Development Center, which ADB headquarters in Manila and the organization’s skills needs. provides high-potential ADB staff 213 from field offices), and 1,536 The program contributed to ADB with a clearer leadership pathway. representatives from DMCs. ADB reducing staffing levels by 3%. Throughout the year, ADB provided launched initiatives to better capture field offices with tailored training highlights and speakers’ knowledge, During the year, ADB improved in supervisory skills. It made a and improve processes for sharing the efficiency, effectiveness, and priority of staff development for materials with external audiences. affordability of its medical insurance; a more inclusive workplace, and integrated its health and wellness rolled out workshops on mitigating services; and moved to improve the unconscious bias and strengthening MAKING THE MOST OF financial sustainability of its staff staff management in diverse and ADB RESOURCES retirement plan. multicultural environments. Administrative Expenses Learning and Development ADB operates knowledge groups Net internal administrative expenses In 2016, ADB focused on leadership based on particular sectors and totaled $589 million in 2016. This development programs to grow and development themes. In 2016, represents a utilization rate of 93% develop strong leaders, establishing these sector and thematic groups against the budget of $636 million. a leadership pipeline for the future. implemented 51 learning programs. ADB achieved savings of $47 million

ADB creates its first website, ADB declares poverty www.adb.org and establishes reduction as its its first representative office overarching goal for the in North America. first time.

45 1999 1995 in 2016, through efficiency measures, to regional financial institutions Integrity and Anticorruption close monitoring of budgetary to expand their knowledge and Activities resources, favorable external factors, capabilities in risk management. ADB’s Office of Anticorruption and lower utilization in some budget and Integrity (OAI) conducts items due to reprioritization. Audit investigations, integrity due Through independent and objective diligence, project procurement- The net internal administrative audit and advisory services, the related reviews, and outreach expenses budget for 2017 is Office of the Auditor General activities. Through these activities, $647 million, a 3% increase on the provides assurance that the internal OAI helps ensure that all ADB 2016 budget. The 2017 budget will controls for managing risks and funds are utilized for their intended support the scaling up of operations, achieving ADB’s development purposes. improving project and portfolio objectives are operating effectively. quality, building organizational In 2016, 138 entities were debarred resilience, and rolling out IT reforms. In 2016, the office issued 16 audit for violating ADB’s Anticorruption The 2017 annual capital budget of reports, covering sovereign and Policy. Enforcement of the policy $9.7 million will fund ADB’s recurring nonsovereign operations, risk acts as a deterrent to other entities. capital requirements. management, treasury, IT, and finance and administration. It also OAI completed 7 reviews relating to Strengthening Risk Management completed 11 advisory engagements project procurement and conducted ADB maintains a corporate on financial and operational controls 87 seminars and workshops for culture that is acutely risk aware. of business units. over 2,500 participants, as ADB It implements business processes continued to increase the knowledge that allow departments and offices In July, the office hosted the and awareness of its stakeholders. to monitor, mitigate, and manage inaugural meeting of heads of specific risks associated with their internal audit from the Association ADB updated its Anticorruption operations. of Southeast Asian Nations’ central Policy to support global tax banks. In August, it released a and financial developments In 2016, ADB paid particular knowledge brief on an alternative by enhancing its role on tax attention to risk management issues approach to training for internal integrity and helping DMCs meet associated with the merger of the auditors in the public sector. international standards. This policy lending operations of the ADF with helps to safeguard ADB’s projects the institution’s OCR. While this In September, the Institute of and reputation. merger will enable ADB to direct Internal Auditors (IIA) conducted greater resources to the countries an external quality assessment ADB approved the establishment most in need, it has the potential of the office to ensure that it of a Respectful Workplace Unit to to increase ADB’s exposure to risk. conformed to IIA standards, to ensure a work environment that is During the year, ADB conducted an evaluate its effectiveness in carrying considerate, inclusive, and diverse. advance review of its prudential risk out its mission, and to identify management policies to anchor its opportunities to enhance its Administrative Services AAA credit rating, and prudentially management and work processes. In June, ADB completed a review increased developmental lending in The assessment concluded that the (with subsequent action plan) anticipation of the ADF-OCR merger. office generally conforms to the IIA’s to enhance its business travel definitions, standards, and code of arrangements and processes. ADB continued to devote substantial ethics. Following the assessment, Implementing the action plan will resources to managing its credit, the office received the highest rating help increase flexibility for travelers market, and operational risks. It that can be given to an internal audit and improve the efficiency of travel also provided technical assistance function. processes. This will reduce the time

ADB establishes its first ADB’s first female NGO center to cooperate Vice-President with civil society. (Khempheng Pholsena) is appointed.

46 ADB AR 2016 2001 2004 $12 B IN LOAN AND GRANT Independent Evaluation DISBURSEMENTS IN 2016, The Independent Evaluation Department AN ADB RECORD (IED) assesses the effectiveness of ADB policies, strategies, and operations. In 2016, IED introduced stronger quality review mechanisms and made the dissemination of evaluation findings more effective.

Across the year, IED evaluated ADB’s safeguard implementation experience and the effectiveness of ADB’s partnerships. At the corporate level, IED contributed to the strategic and operational directions of ADB by evaluating ADB’s engagement with middle- income countries, conducting a comparative institutional review of ADB’s private sector operations, and strategically reviewing policies on environmentally sustainable growth. At the project level, IED updated its guidelines for evaluating public sector operations. The guidelines set out the principles and rating standards to be used in preparing both self- evaluations and independent evaluations.

In October, IED completed the evaluation of the Sri Lanka program. ADB Management agreed on all recommendations for spent by staff on travel arrangement based approach, strengthening improving policy reform work in the ang processing by around 1,000 internal governance and efficiency. infrastructure sectors, defining a strategy working days every year. This is essential to modernizing for inclusive growth, and increasing support ADB’s institutional procurement and for private sector development and the education sector. Over the year, IED also In July, ADB introduced an delivering IT reforms. organizational resilience framework provided validations of country partnership to allow it to fulfill its core mission ADB is committed to environmentally strategy final reviews for Bangladesh, the Lao People’s Democratic Republic, Myanmar, if a large disaster—natural or sustainable operations and maintains and Viet Nam. The findings fed into the otherwise—occurs in Metro Manila. its international certifications in preparation and design of country partnership The framework outlines a set of energy management, environmental strategies and operational plans. actions from 2016–2021 to make management, occupational health ADB a more resilient organization. and safety, and business continuity. In July, IED cohosted with the Lee Kuan In 2016, ADB established an active In December, ADB headquarters Yew School of Public Policy an international disaster recovery site outside the in Manila was recertified as gold learning event, held in Singapore, on cities and Philippines to replicate key financial standard for Leadership in Energy middle-income countries. The event attracted around 300 participants from 18 countries. processes and data. Staff were and Environmental Design (LEED) Various high-profile speakers, including ADB trained to operate ADB’s remote Existing Buildings Operations and President Takehiko Nakao, discussed solutions access capability to improve the Maintenance (EB+OM), while the and policy responses to the challenge of organization’s capacity to function India Resident Mission continues rapid urbanization in Asia and the Pacific. In during crisis. Staff and their families to maintain its LEED EB+OM gold September, IED co-organized with the Asia- were briefed on preparing for a standard. In 2017, ADB plans to Pacific Finance and Development Institute the disaster, and emergency disaster kits purchase carbon credits to offset the inaugural Asian Evaluation Week in Xi’an in were provided to staff at low rates. CO emissions it is unable to avoid. the People’s Republic of China. This event— 2 which will be held again in 2017—highlighted In August, ADB initiated a new Information Technology the latest thinking on evaluation, including its procurement policy for institutional ADB will soon harness new and use for better results and accountability. goods and services. The policy moves creative technology solutions to from being based on compliance develop a stronger, better, faster and rules to a risk and principles- organization. 47 In 2016, ADB focused on modernizing Mutual Understanding its IT landscape, putting in motion ADB’s ombudsperson is a neutral, ‘Real-Time ADB.’ This framework independent, and confidential for IT reforms will create a more resource available to all staff to automated, efficient, productive, resolve workplace concerns in an and resilient working environment informal way. In 2016, more than across ADB operations. While 220 ADB staff members from implementation is expected to span headquarters and field offices the next 3 years, significant benefits contacted the ombudsperson to were already realized in 2016. ADB discuss workplace issues. now has better facilities for traveling staff, easier and expanded remote The ombudsperson provided access to information systems, and use feedback to ADB Management A NEW BRAND OF LEADERSHIP of advanced mobile devices. on workplace trends, visited eight AT ADB field offices, facilitated numerous To enhance the skills of its current and IT operations achieved significant group meetings, and developed future leaders, ADB launched a suite of efficiency gains in 2016, with an 8% a forum for administrative staff. leadership development programs relevant reduction in recurrent IT costs, while The ombudsperson also initiated to each management level in 2016. To set increasing fourfold the bandwidth a ‘blind lunch date’ program to a benchmark for leadership performance, of ADB field offices. Throughout enhance networking and staff 24 heads and deputy heads of departments, the year, ADB further simplified its information sharing. In September, 38 directors and country directors, and automated operation processes. the ombudsperson commissioned 199 staff with supervisory responsibility DMCs now greatly benefit from an evaluation of its effectiveness by participated in tailored leadership training. the introduction of a web-based The development programs will help the Harvard Negotiation & Mediation existing leaders champion sustainable disbursement system, while jobseekers Clinical Program. change and transform newer managers into can now access a convenient, effective leaders. cloud-based e-recruitment system. The ombudsperson also made ADB encouraged continued use of presentations at meetings of videoconferencing and internet-based the International Ombudsman communications to achieve further Association in April, and the cost efficiencies. It also adjusted its Mediators and Ombudsman of financial systems to enable the the United Nations and Related ADF-OCR merger. International Organizations in June. 2016 ADB becomes the ADB issues thematic ADB begins work on a first multilateral bonds for the first time new corporate strategy development bank (water and clean energy). to guide its operations to adopt a corporate results framework. until 2030.

48 ADB AR 2016 2008 2010 SPECIAL APPENDIX IMPACT OF THE ADF–OCR MERGER AND ADB’S FINANCIAL STATEMENTS

49 COMBINATION OF OCR AND ADF RESOURCES

In 2014, ADB introduced a proposal to enhance ADB’s financial capacity in a sustainable manner through more efficient and effective management of its capital resources. The proposal entailed combining Asian Development Fund (ADF) lending operations with ordinary capital resources (OCR) and retaining the ADF as a grant-only operation. ADB would continue concessional lending on the same terms and conditions as currently provided to ADF countries through the OCR window, while the ADF would continue to provide grant assistance. In April 2015, the ADB Board of Governors adopted a resolution authorizing the termination of ADF’s loan operations and the transfer of ADF’s loans and other assets to OCR effective 1 January 2017 (the 2015 Resolution). This resolution was further amended in June 2016. Accordingly, on 1 January 2017, ADB transferred ADF loans and other assets totaling $30,812 million from ADF to OCR. The transferred ADF assets composed of loans including accrued interest totaling $27,088 million and liquid assets totaling $3,724 million. The source of funding for ADF came from donor contributions, OCR net income transfer and set-aside resources. The transfer of these assets was treated as a contribution from ADF to OCR and a return of the set-aside resources from ADF to OCR. This resulted in the recognition of one-time income of $30,748 million in OCR and a return of the set-aside resources of $64 million. The corresponding income recognized in OCR has been allocated to ordinary reserves as from 1 January 2017 following the adoption of Board of Governors Resolution No. 387. Appendix Tables A1 and A2 show the summary effects of the transfer of certain ADF assets on 1 January 2017. The proportionate interest of ADF donors in the transferred assets as of 1 January 2017, taking into account the value of paid-in donor contributions that have been made available for operational commitments which are deemed by ADB to be applied for the transferred assets, was determined in accordance with Article V of the Regulations of the Asian Development Fund. The value of each donor’s paid-in contributions was fixed in US dollars based on the special drawing right value of each donor contribution as of 1 January 2017. This was then used to determine the sources of funds in the transferred assets on 1 January 2017, the date of the termination of the ADF loan operations and transfer of assets to OCR. Under the 2015 Resolution, the proportionate interest of an ADF donor will be taken into account in the event of the withdrawal of that donor from ADB and ADB’s repurchase of its shares, and in the theoretical termination of ADB operations and liquidation of its assets. Appendix Table A3 shows the funding sources of the transferred assets.

50 ADB AR 2016 Table A1: Asian Development Bank—Ordinary Capital Resources Summary Statement of Effect of Asset Transfer from ADF ($ million) Asset Transfer Balance as of from ADF Balance as of 31 December 2016 1 January 2017 1 January 2017 Due from banks 661 0 661 Investments for liquidity purpose 26,025 3,696 29,721 Securities purchased under resale arrangements 102 12 114 Loans outstanding — Operationsa Sovereign Regular 62,413 – 62,413 Concessional – 27,025 27,025 62,413 27,025 89,438 Nonsovereign 5,186 – 5,186 67,599 27,025 94,624 Equity investments—Operations 814 – 814 Other debt securities—Operations 150 – 150 Accrued interest receivable 387 79 466 Derivative assets 29,143 – 29,143 Other assets 973 – 973 TOTAL ASSETS 125,854 30,812 156,666

TOTAL LIABILITIES 108,640 – 108,640 EQUITY Capital Stock Subscription installments matured 7,154 – 7,154 Less – capital transferred to ADF and discounts 79 (64) 15 7,075 64 7,139 Nonnegotiable, noninterest-bearing demand obligations on account of subscribed capital (676) – (676) 6,399 64 6,463 Net notional maintenance of value receivable (1,474) – (1,474) Ordinary reserve From ADF assets transfer – 30,748 30,748 From retained earnings 12,211 – 12,211 Subtotal 12,211 30,748 42,959 Special reserve 340 – 340 Loan loss reserve 172 – 172 Surplus 1,065 – 1,065 Cumulative revaluation adjustments account 88 – 88 Net income after appropriation – 2016 (11) – (11) Accumulated other comprehensive loss (1,576) – (1,576) TOTAL EQUITY 17,214 30,812 48,026 TOTAL LIABILITIES AND EQUITY 125,854 30,812 156,666 – = nil, 0 = amount less than $0.5 million, ADF = Asian Development Fund. Note: The undisbursed ADF loan balance as of 31 December 2016 of $8,444 million was assumed by OCR on 1 January 2017. a Including net unamortized loan origination cost, allowance for loan losses and Heavily Indebted Poor Countries debt relief, and fair value adjustment. Source: ADB Controller’s Department.

51 Table A2: Asian Development Bank—Asian Development Fund Summary Statement of Effect of Asset Transfer to OCR ($ million) Balance as of Asset Transfer 31 December to OCR Balance as of 2016 1 January 2017 1 January 2017 Due from banks 281 (0) 281 Investments for liquidity purpose 5,726 (3,696) 2,030 Securities purchased under resale arrangements 13 (12) 1 Loans outstanding—Operationsa 27,306 (27,306) – Accrued interest receivable 87 (79) 8 Other Assets 172 172 TOTAL ASSETS 33,585 (31,093) 2,492

TOTAL LIABILITIES 2,637 – 2,637 FUND BALANCES Contributions received Contributed resources—net of unamortized discount 32,667 – 32,667 Set-aside resources 64 (64) – Transfers from OCR and TASF 1,703 – 1,703 34,434 (64) 34,370 Nonnegotiable, noninterest-bearing demand obligations on account of contributions (1,633) – (1,633) Accumulated deficit From operations (361) (361) From asset transfer to OCR (31,029) (31,029) Subtotal (361) (31,029) (31,390) Accumulated other comprehensive loss (1,492) – (1,492) TOTAL FUND BALANCES 30,948 (31,093) (145) TOTAL LIABILITIES AND FUND BALANCES 33,585 (31,093) 2,492 – = nil, 0 = amount less than $0.5 million, OCR = ordinary capital resources, TASF = Technical Assistance Special Fund. a Net of allowance for Heavily Indebted Poor Countries debt relief. Source: ADB Controller’s Department.

Table A3. Proportionate Share of Funding of the ADF Assets Transferred to OCR Source of Funds in ADF $ million %a Source of Funds in ADF $ million %a Donor Contributions Australia 2,213 7.18 Malaysia 24 0.08 Austria 257 0.83 Nauru 0 0.00 Belgium 231 0.75 Netherlands 716 2.32 Brunei Darussalam 17 0.06 New Zealand 157 0.51 Canada 1,889 6.13 Norway 266 0.86 China, People’s Republic of 84 0.27 Portugal 79 0.26 Denmark 242 0.79 Singapore 18 0.06 Finland 180 0.58 Spain 432 1.40 France 1,270 4.12 Sweden 436 1.42 Germany 1,679 5.45 Switzerland 359 1.17 Hong Kong, China 93 0.30 Taipei,China 90 0.29 India 24 0.08 Thailand 15 0.05 Indonesia 14 0.05 Turkey 114 0.37 Ireland 79 0.26 United Kingdom 1,440 4.67 Italy 1,099 3.57 United States 4,060 13.18 Japan 11,197 36.34 Subtotal 29,309 95.13 Kazakhstan 4 0.01 Korea, Republic of 484 1.57 OCR Net Income Transfers 1,439 4.67 Luxembourg 47 0.15 Set-Aside Resourcesb 64 0.20 Total $30,812 100.00 ADF=Asian Development Fund, OCR =ordinary capital resources Note: 0 = $0.3 million and 0.00 = 0.001%. a Determined from the special drawing right value of all contributions received, excluding unpaid installments and amounts withheld from pro pata exercise as of 31 December 2016 based on the exchange rate set forth in the relevant authorizing Resolution of the Board of Governors, in accordance with Article V of the Regulations of the Asian Development Fund b Based on Article 19.1 (i) of the Agreement Establishing the Asian Development Fund Source: ADB Treasury Department.

52 ADB AR 2016

s  s Rise of newly APEC established Emerging India and industrialized ascending PRC economies (“Four Asian Tigers”)  s End of Viet Nam War s Asia’s Green Asia’s Miracle in s  s Revolution   Asia as engine of global growth   full bloom End of Cold War Asian Financial Crisis  Oil Shock Oil Shock Global Financial Crisis

     


       Midterm ADB established First ADB HQ First field o¨ce PRC joins ADB Central Asian Poverty reduction as Strategy Review of inaugurated in Manila Dhaka Republics start overarching goal 2020 Strategy to join ADB 2020 INSTITUTIONAL

T. Watanabe S. Inoue T. Yoshida M. Fujioka K. Tarumizu M. Sato T. Chino H. Kuroda T. Nakao ‘“””•‘“–’ ‘“–’•‘“–” ‘“–”•‘“—‘ ‘“—‘•‘“—“ ‘“—“•‘““š ‘““š•‘“““ ‘“““•’˜˜™ ’˜˜™•’˜‘š ’˜‘š•present

OPERATIONAL         Asian Financial First First result-based Lending reaches $1 billion First direct equity First nonsovereign lending, Sri Lanka investment, loan, Pakistan Crisis support multitranche   Republic of Korea $7.8 billion  financing First loan, First program loan, Operations in facility Countercyclical Thailand Bangladesh  Afghanistan resume projects for Support Facility Greater after 23 years Pakistan Mekong Subregion Asian Tsunami   program Fund Reengagement with Myanmar

FINANCIAL

 GCI I   
  (General Capital Increase) GCI II GCI III GCI IV GCI V OCR AND ADF MERGER APPROVED

  
            
         ADF I ADF established ADF II ADF III ADF IV ADF V ADF VI ADF VII ADF VIII ADF IX ADF X ADF XI ADF ‘’ (Asian Development Fund)

   

    authorized capital authorized capital  BILLION 
 BILLION   Members  Members |  Field oces USB CONTENTS • Evaluation Results for Nonsovereign ACKNOWLEDGMENTS Operations by Developing Member ANNUAL REPORT 2016 Country by Evaluation Year, 2006–2016 • Evaluation Results for Nonsovereign Board of Directors Working Group on the Annual Report 2016 FINANCIAL REPORT Operations by Sector by Evaluation Year, • Management’s Discussion and Analysis Michael Strauss (Chair), Scott Dawson, Wenxing Pan, Muhammad Sami Saeed, 2006–2016 – Overview • Direct Value-Added Cofinancing Johannes Schneider, Masashi Tanabe • Publisher Satinder Bindra – Ordinary Capital Resources Arrangements, 2015–2016 (Volume) • Publishing, Team Leader Robert Davis • Managing Editor – Special Funds • Direct Value-Added Cofinancing Andrew Perrin • Production Managers Ma. Theresa Mercado, – Grant Cofinancing Arrangements, 2015–2016 (Number of – Appendix: Condensed Management Stephanie Salazar (ADB Member Fact Sheets) • Editing Paul Dent Projects) Report Balance Sheets • Projects Involving DVA Official and • Proofreading Ricardo Chan, Joel Pinaroc • Art Director Anthony Victoria • Financial Statements Other Concessional Cofinancing, 2016 • Design Cleone Baradas • Typesetting Edith Creus, Prince Nicdao, Joseph – Ordinary Capital Resources • Projects Involving DVA Official and Manglicmot (ADB Member Fact Sheets) – Asian Development Fund Other Concessional Grant Cofinancing, – Technical Assistance Special Fund 2016 – Japan Special Fund • Overall Procurement of Goods, Works, The Board of Directors Working Group on the Annual Report would like to – Asian Development Bank Institute and Consulting Services, 2016 Project/ thank all ADB departments and offices for their significant contributions to this – Pakistan Earthquake Fund Program Loans, Grants, and Technical report. – Regional Cooperation and Assistance Operations Combined, By Integration Fund Origin of Goods and Services – Climate Change Fund • Overall Procurement of Goods, Works, – Asia Pacific Disaster Response Fund and Consulting Services, 2016 Project/ – Financial Sector Development Program Loans, Grants, and Technical Every effort has been made to ensure the accuracy of the data used in this Partnership Special Fund Assistance Operations Combined, publication. Variations in data in ADB publications often result from different By ADB Member OPERATIONAL DATA • Cumulative Contracts Awarded by Origin • Total ADB Operations by Sector and by publication dates, although differences may also come from the source and of Goods and Services as of 31 December Region, 2016 interpretation of data. ADB accepts no responsibility from any consequence of 2016, Loans, Grants, and Technical • Sovereign Approvals, 2016 Assistance Operations their use. • Nonsovereign Approvals, 2016 • Cumulative Contracts Awarded by • Approvals by Modality, 2015–2016 ADB Members as of 31 December 2016, • Sovereign and Nonsovereign Approvals, By making any designation or reference to a particular territory or geographical Loans, Grants, and Technical Assistance 2015–2016 Operations area, or by using the term ‘country’ in this document, ADB does not intend to • Sectoral Distribution (Sovereign and • ADF-Contributed Resources make any judgments as to the legal or other status of any territory or area. Nonsovereign Approvals Including • Japan Special Fund—Regular and Cofinancing), 2015–2016 Supplementary Contributions • Nonsovereign Approvals by Year, • Japan Special Fund—Asian Currency In this publication, ‘$’ refers to US dollars. 1984–2016 Crisis Support Facility • Nonsovereign Approvals by Developing

Member Country, 1984–2016 © 2017 Asian Development Bank ORGANIZATIONAL • Top Recipients by Approval Including INFORMATION Cofinancing, 2016 • Members, Capital Stock, and ISSN 306-8370 • Top Recipients by Approval Excluding Voting Power ISBN 978-92-9257-773-5 (Print), 978-92-9257-774-2 (e-ISBN) Cofinancing, 2016 • Resolutions of the Board of Governors • Nonsovereign Approvals by Top Publication Stock No. FLS178712 Adopted in 2016 Countries, 2015–2016 DOI: http://dx.doi.org/10.22617/FLS178712 • Selected Policy, Strategy, and Financial • Projects Involving Commercial Papers Discussed by the Board in 2016 Cofinancing • Board of Governors • Technical Assistance Grants Asian Development Bank • Board of Directors and Voting Groups • Amount of Loans and Grants Made 6 ADB Avenue, Mandaluyong City • Committees of the Board of Directors Effective, Contracts Awarded, and 1550 Metro Manila, Philippines • ADB Institute Advisory Council Disbursements • Organizational Structure [email protected] • Number of Projects Under • Summary of Internal Administrative Administration, Actual Problem, www.adb.org Expenses­—2016 and Budget for 2017 Completed, and PCRs/XARRs/PPERs • 2016 Annual Base Salary of the Board of Circulated Directors and Management Subscriptions to ADB’s Annual Report are available to reference libraries • Net Transfer of Resources (Ordinary • Staff Representation of ADB Members Capital Resources, Asian Development and institutions. • Number of Authorized Positions in Fund, and Other Special Funds Grants), Resident Missions 2014–2016 To subscribe, email [email protected] • Growth in Resident Missions and • Evaluation Results for Sovereign Authorized Staff Positions at Resident Operations by Developing Member Missions Country by PCR Year, 2006–2016 • Evaluation Results for Sovereign Operations by Sector by PCR Year, 2006–2016 ADB MEMBER FACT SHEETS

Annual Report 2016 is printed using vegetable oil-based inks on recycled paper. Printed on 100% recycled paper We have had a long sleep. Asians have been all too ready to rest upon the laurels of a distinguished past … But the time has come to roll up our sleeves and prepare to cultivate this new era of self-discipline.

Takeshi Watanabe, first ADB President, November 1966

Half a century later, the region’s economic growth and success in reducing poverty have exceeded even the most optimistic forecasts. But we cannot be complacent. The fact remains that there are still 330 million people living in absolute poverty across Asia and the Pacific.

Takehiko Nakao, current ADB President, 2016 ADB Annual Report