Projects & Operations
Total approvals during 2008-2013 indicate that the Bank Group played an important counter-cyclical role in financing its Regional Member Countries in the past decade. For example, total lending was UA 8.06 billion in 2009, the peak of the global financial crisis. The Bank devised measures, including quick disbursing budget support operations, and short-term trade and liquidity facilities to meet increased demand from RMCs. Bank Group approvals have since returned to normal levels, with total annual approvals between UA 4 billion and 6 billion.
For 2013, approvals amounted to UA 4.39 billion, an increase of 3.1 percent compared to 2012. Total ADF approvals were UA 2.27 billion, an increase of 20.1 percent over 2012. However, ADB approvals amounted to UA 1.83 billion, representing a reduction of 12.0 percent compared to 2012. Of the Bank Group approvals of UA 4.39 billion, UA 3.56 billion (81.2 percent) was in the form of loans and grants, and the remaining UA 824.7 million (18.8 percent) comprised debt relief, private sector equity participation, guarantees, reallocation and allocations to Special Funds.
Economic and political disruption affected major borrowers from the ADB window, and led to downward adjustments in their ratings with implications for Bank lending. Although the ADB sovereign window achieved only 39.4 percent of its UA 1.7 billion target, the ADB private sector window met its target of UA 1.1 billion. The challenge ahead is how to generate new business for both the sovereign and private sector windows. During 2013, the Bank’s management explored a number of approaches. They are still under consideration, but provide the following useful pointers to the options available to the Bank:
- Amend the Bank’s credit policy to allow countries, currently confined to the ADF window to, under well-stipulated conditions, access ADB resources;
- Scale-up public-private partnerships and co-financing opportunities to increase sovereign financing from the ADB window; and
- Explore new sources of financing and partnerships ranging from equity and pension funds to engaging key emerging countries.
Operations by sector
Bank Group operations by sector, indicate that selectivity and a focus on results continued to guide Bank Group operations in 2013.
Infrastructure approvals amounted to UA 2.05 billion (57.6 percent of total approvals). It accounted for 39.6 percent (UA 564.9 million) of ADB approvals and 69.7 percent (UA 1.47 billion) of ADF approvals. Transport was the dominant subsector followed by energy, and water and sanitation.
Finance operations comprising lines of credit, trade finance, and support for small and medium-sized enterprises (SMEs) were significant in the ADB window, but not in the ADF window.
On the other hand, approvals for water supply and sanitation were only significant at the ADF window.
Bank Group interventions in agriculture and rural development amounted to UA 428.7 million or 12 percent of total approvals. They encompassed a range of projects and programs in irrigation, water storage and management; rural power supply; rural and community roads (including maintenance); marketing and storage facilities; and agro-processing. Multisector operations, involving two or more sectors, accounted for UA 449.2 million or 12.6 percent of total approvals in 2013. They targeted improvements in public financial management and institutional reforms. Finance sector operations accounted for UA 288 million (8.1 percent) for the Bank Group, consisting of lines of credit targeted at SMEs, equity participation, and financial guarantees to private enterprises and to multinational projects to promote regional integration. Bank Group lending targeted at the environment amounted to UA 9.2 million.
Operations by Sub-region
- Central Africa
In 2013, total loan and grant approvals for the sub-region declined by 24.5 percent to UA 243.9 million due to socio-economic disruptions that impeded operations. Operations were in three sectors: infrastructure (water and sanitation, transport and energy), accounting for 79.5 percent, multisector (13.6 percent) and agriculture and rural development (6.9 percent).
- East Africa
In 2013, total loan and grant approvals amounted to UA 597.3 million, an increase of 33.6 percent over 2012. Infrastructure accounted for 80.2 percent of total approvals, including transport, energy, and water and sanitation. The private sector component of the Lake Turkana Wind Power Project in northern Kenya, at UA 98.3 million, is the largest non-sovereign Bank operation, approved in the sub-region so far. The project will reduce the energy gap in the country, enhance energy diversification and prevent the emission of 16 million tons of CO2 compared to a fossil fuel-fired power plant. On completion, it will be the largest wind power project in Africa. Notably, the Uganda Community Agricultural Infrastructure Program (CAIIP-1) was one of two Bank operations that won a US Treasury Award for its inclusiveness and overall impact on poverty reduction in 2013.
- North Africa
Owing to the political disruptions mentioned above, the share of North Africa in total borrowing from the Bank declined from 31 percent in 2012 to 6.4 percent in 2013, equivalent to UA 886.7 million. Bank interventions were mainly in the social sector (89.6 percent), but agriculture received 8.5 percent. Infrastructure, the main basis for previous lending, did not feature in the lending to the region in 2013.
- Southern Africa
Total approvals amounted to UA 615.2 million and infrastructure (transport, energy, ITC, water and sanitation) received 62.6 percent, followed by finance with 16.3 percent. These included two infrastructure projects in Zimbabwe and one green growth project in Zambia. The Zimbabwe projects funded by the Zimbabwe Multi-Donor Trust Fund included: (i) Urgent Water Supply and Sanitation Rehabilitation Project and, (ii) Emergency Power Infrastructure Rehabilitation Project. The Zambia project funded by the Climate Investment Funds is for strengthening climate resilience in the Kafue Sub-Basin.
- West Africa
Total approvals amounted to UA 991 million in 2013. Infrastructure (energy, water and sanitation, and transport) received 31.9 percent, followed by multisector with 30.2 percent, and agriculture and rural development, with 26 percent. Interventions in Nigeria, which helped boost the total for the sub-region, included projects in transport and governance, and support for agricultural transformation. In addition, a fertilizer project was supported by the private sector.
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