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ADB to focus on private sector, green projects

The Asian Development Bank (ADB) has revamped its operating model to focus more on private sector development and climate change-related projects.

In a report on its new operative model, the Manila-based multilateral development bank said it will increase private sector financing to a third of its operations by 2024. The share of nonsovereign operations (NSO) in bank operations stood at 27 percent in 2021.

The report also stated that climate change-related projects will take up 100 percent of its sovereign operations and 85 percent of its NSO aligned with the Paris Agreement by 2023.

“These reforms are both timely and essential,” ADB President Masatsugu Asakawa said in a statement. “Our new operating model will position us to better respond to the complex development challenges now faced by Asia and the Pacific. It builds on ADB’s core strength, our staff, to help us deliver solutions with the greatest development impact for the region.”

The focus on increasing its NSO will mean that the ADB will expand its Private Sector Operations Department (PSOD). This will mean hiring more staff with private sector transaction-related skills.

The report also noted that in terms of climate change, this means the bank does not only intend to increase projects financing of adaptation and mitigation measures but also intends to improve its quality.

“The changing development landscape prompted ADB to focus on aspects of its business in which a paradigm shift would enable it to do more for and remain relevant to its DMCs. As a result, the organizational review focuses on the following four fundamental shifts: solutions, private sector development, climate change, and ways of working,” the report read.

The road map is the result of an organizational review, led by Asakawa, that began in June 2021 and was informed by views from ADB’s regional clients, Management, Board of Directors, and staff.

ADB said its review process was guided by the principle of maximizing its development effectiveness.

For ADB’s clients, the new operating model will enhance the experience of working with the Bank. ADB’s five regional departments—covering Central and West Asia, East Asia, the Pacific, South Asia, and Southeast Asia—and resident missions in countries with operations will become a single window for all ADB products and services, both sovereign and nonsovereign.

Staff and expertise from the sectors, themes, and other specializations in which ADB operates will be consolidated, with increased deployment to regions and countries to offer a better range and quality of solutions, resulting in more staff working in the field, closer to clients.

The new operating model is expected to roll out in the second quarter of 2023. A phased implementation will minimize disruptions to ADB’s clients and development partners.

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