ADB, Wabag Sign $25 Million Debt Facility to Support Sanitation and Water Security in India

NEW DELHI, INDIA (25 November 2022) — The Asian Development Bank (ADB) signed a $25 million debt facility with VA Tech Wabag Limited (Wabag) to support sanitation and water security through the development of new sewage treatment plants in India.

The financing will be used for long-term capital requirements for engineering, procurement, and construction, and the subsequent operation and maintenance of the sewage treatment plants. ADB will also provide technical assistance of up to $35,000 to enhance Wabag’s capacity to assess and mitigate environmental and social risks for future projects.

“The disposal of wastewater without proper treatment has put significant pressure on India’s already scarce water resources and the quality of those resources,” said ADB’s Private Sector Operations Department Director General Suzanne Gaboury. “This project is ADB’s first private sector financing in India’s water sector and will help to crowd in urgently needed international and domestic financing for the sector to ease water stress as demand increases.”

India is facing severe water stress, with demand expected to reach double the available water supply by 2030. Less than 30% of the water released back into rivers is treated, rendering about one-third of river water unfit for human consumption. Private water companies face difficulties in raising long-term working capital financing due to perceived high risks and low interest among domestic financing institutions, as the sector presents limited opportunities for profit.

“This is a proud moment for Wabag as we add another feather to our cap with this strategic funding from ADB that validates our mission and focus on clean, green, and sustainable water technologies,” said Wabag’s Managing Director and Group CEO Rajiv Mittal. “We are fully aligned with ADB on the need to increase interventions in India’s water sector.”

Wabag is a leading player in India's water industry, with expertise spanning almost a century. Wabag offers a complete range of technologies and services for total water solutions in both municipal and industrial sectors. It has over 1,600 water professionals spread over 25 countries on 4 continents, as well as research and development centers in Austria, India, and Switzerland.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Source: ADB

ADB, Bank of Georgia Sign Milestone Risk Sharing Agreement for Supply Chain Financing

TBLISI, GEORGIA (24 November 2022) — The Asian Development Bank (ADB) and the Bank of Georgia (BOG) have signed a risk-sharing agreement to promote supply chain finance in Georgia.

Through the agreement, the first of its kind for ADB, the BOG and ADB’s Trade and Supply Chain Finance Program (TSCFP) will share corporate risk for supply chain transactions on a 50%-50% basis. The agreement is the culmination of 2 years of technical assistance provided by TSCFP to BOG.

“This agreement builds on our trade finance partnership with BOG that started in 2011 and will be catalytic in developing supply chain finance in the region,“ said TSCFP Head Steven Beck. “By promoting supply chain finance with our partner banks, we help small and medium-sized businesses in developing Asia to participate in global supply chains, spur economic growth, and contribute to job creation.”

Supply chain finance provides working capital to suppliers including small and medium-sized companies (SMEs) by leveraging their relationships with larger corporates. ADB estimates the gap between demand for trade finance and the money available is at least $2 trillion, with SMEs the worst affected. ADB’s TSCFP provides training and other technical assistance to banks across developing Asia to bring them up to speed on international best practices for the provision of supply chain finance.

“SMEs are especially important for the Bank of Georgia, and this agreement aims to further strengthen them and help them to explore new markets,” said Bank of Georgia’s Head of Small and Medium Business Department Zurab Masurashvili.

Backed by ADB's AAA credit rating and working with more than 250 partner banks, TSCFP enables trade and supply chains with loans and guarantees that underpin economic growth and create jobs to improve people’s lives. TSCFP initiatives help make global trade and supply chains green, resilient, inclusive, transparent, and socially responsible.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Source: ADB

ADB and Indonesia Partners Sign Landmark MOU on Early Retirement Plan for First Coal Power Plant Under Energy Transition Mechanism

BALI, INDONESIA (14 November 2022) — The Asian Development Bank (ADB) today joined with key partners in Indonesia to sign a memorandum of understanding (MOU) to jointly explore the early retirement of the first coal-fired power plant owned by an independent power producer (IPP) under ADB’s Energy Transition Mechanism (ETM).

The signing, which took place on the sidelines of the G20 Leaders’ Summit in Bali, was attended by ADB President Masatsugu Asakawa, Cirebon Electric Power (CEP) President Director Hisahiro Takeuchi, PT PLN (Persero) President Director Darmawan Prasodjo, and Indonesian Investment Authority (INA) CEO Ridha D. M. Wirakusumah.

The MOU agrees to open detailed discussions to accelerate the retirement of Cirebon-1, a 660-megawatt plant owned by CEP in West Java.

The planned transaction aims to achieve significant carbon dioxide emission reductions through a replicable model that can be applied to other IPPs in Indonesia, other parts of Asia and the Pacific, and beyond. Once a definitive agreement is reached among the parties, it is anticipated that ADB would provide an early retirement facility in the form of senior debt, on the condition that the tenor of the power purchase agreement between CEP and PLN will be shortened.

“This MOU with our trusted partners in Indonesia is a landmark moment for ADB’s Energy Transition Mechanism and the clean energy transition it will advance,” said Mr. Asakawa. “As Asia and the Pacific’s climate bank, ADB is proud to be showing the viability of this approach, supported by the outstanding leadership of Indonesia. We encourage other financial stakeholders to engage in the just and affordable energy transition here and across Asia and the Pacific."

"ETM provides an innovative approach for companies like CEP to make the transition from coal to clean energy while providing reliable and affordable power for Indonesia’s energy infrastructure," said Mr. Takeuchi. “This MOU is a big step forward for Indonesia and we are proud to be working with the Asian Development Bank and Indonesian Investment Authority.”

"PLN is committed to being a leader in Indonesia’s energy transition toward net zero emissions in a just and affordable manner," said Mr. Prasodjo. "PLN’s commitment to clean energy and working through the ETM with IPPs, such as CEP, can significantly accelerate the energy transition."

“INA’s role is to help attain Indonesia’s sustainable development and to build wealth for the country’s future generations,” said Mr. Wirakusumah. “The ability of INA to complement the other partners with equity can complete the suite of financial tools that can help to scale up ETM activities in Indonesia.”

ETM is a regional, transformative, blended-finance program that seeks to retire existing coal-fired power plants on an accelerated schedule and replace them with clean power capacity. ETM is one component of a larger set of initiatives both domestic and multilateral, that aims to help Asia and the Pacific mitigate the worst impacts of climate change, such as extreme sea level rise and destructive weather events.

The MOU was signed at an event in which Indonesia launched its ETM Country Platform, a government financing and investment framework that will fund and manage the country’s energy transition activities. ADB signed an additional MOU with PT Sarana Multi Infrastruktur (Persero) (“PT SMI”) to provide support, including staff resources and capacity building for the platform.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Source: ADB