ADB scales up corporate finance lending in Asia

By Thuy Tuong
Wed, May 24, 2023 | 11:26 am GMT+7

The Asian Development Bank (ADB) is ramping up its lending to the private sector and financial institutions across the continent via its Private Sector Operations Department, or PSOD.

“ADB traditionally has been an infrastructure bank with the majority of our assets in long-dated project finance. We are of course still a project finance lender,” PSOD director general Suzanne Gaboury said at a business conference held alongside ADB’s annual meeting in South Korea’s Incheon earlier this May.

ADB’s rise of corporate finance is a result of the dynamic situation facing its member countries resulting from the ongoing Ukraine conflict and rising inflation and interest rates, Gaboury said.

“We are very conscious of these developments. We want ADB to help address these issues and provide a stable source of financing solutions to our member countries,” she explained.

“We have good clients we are working with and provide a much more flexible solution and allow them to deploy financing to meet their needs.”

Her department, PSOD, is also supporting agribusiness to address food security among its member countries. At the ADB annual meeting a year ago, the bank launched a $14 billion food security program with the private sector.

PSOD is also looking at smaller transactions in which it provides finance directly to smaller companies, such as in the fishing or milk production sectors, Gaboury told the business conference.

At the ADB annual meeting in Incheon this May, Gaboury and CEO Philippe Valahu of the Private Infrastructure Development Group (PIDG) signed a memorandum of understanding for cooperation on early-stage, private sector infrastructure investments in Asia and the Pacific.

Early-stage projects are characterized by significant risks, upfront costs, and time on project preparation to advance them to a stage to attract commercial sponsors and financing. ADB and PIDG will explore possible partnerships in developing and financing sustainable infrastructure projects that address climate change and contribute to sustainable development and poverty reduction in ADB’s developing member countries.

ADB’s Suzanne Gaboury (left) and CEO Philippe Valahu of PIDG sign their partnership in South Korea’s Incheon in early May 2023. Photo courtesy of ADB.

ADB’s Suzanne Gaboury (left) and CEO Philippe Valahu of PIDG sign their partnership in South Korea’s Incheon in early May 2023. Photo courtesy of ADB.

It is estimated the region needs around $1.7 trillion a year, from 2016 to 2030, to meet infrastructure demand while maintaining its growth momentum, eradicating poverty, and addressing climate change. The public sector cannot meet the rising demand for financing, ADB said.

The bank last week signed a $25 million equity investment in private equity fund Exacta Asia Investment III LP managed by Singapore-headquartered investment firm Exacta to provide capital to companies engaged in healthcare, financial services, education, manufacturing, business services, and consumer sectors in Southeast Asia.

“The fund will invest in companies that look to provide quality products and services in the region’s underpenetrated markets, which will help drive business growth,” Gaboury said in a May 18 release.

“ADB’s investments in the private equity sphere not only mobilize private capital but also contribute to the adoption of environmental, social, and governance best practices,” she said.

This is ADB’s second commitment to Exacta. In 2018, ADB invested $25 million in Exacta Asia Investment II LP which provided investments for small and medium-sized enterprises in Southeast Asia, particularly those in Vietnam, Indonesia, Malaysia, Philippines, Singapore, and Thailand.

In electric mobility, the Australian government, in partnership with the ADB, announced on May 16 that it is awarding a technical assistance package worth $500,000 to VinES Energy Solutions JSC of Vietnam’s largest conglomerate Vingroup.

Administered by the Australian Climate Finance Partnership (ACFP), the package is aimed at bolstering the development and sustainable production of lithium-ion battery technology for electric vehicles (EVs) in Vietnam, where Vingroup’s EV maker VinFast has been ramping up production over the past two years. VinFast is also expanding its business in the U.S., Canada, and European markets.

With the grant, VinES will conduct a comprehensive study in collaboration with ADB and the Australian government. The study’s primary objectives include the development of sustainable and diverse supply chains for battery production in Vietnam, the exploration of best practices for the environmentally responsible repurposing and recycling of used EV batteries, and the identification of potential areas for job creation and worker upskilling within the EV supply chain.

ADB announced last October that it had mobilized a $135 million climate financing package for VinFast to manufacture the country’s first fully-electric public transport bus fleet and first national electric vehicle charging network. The ADB assistance aims to support Vietnam’s efforts to achieve its net-zero greenhouse gas emissions by 2050 and expand high-tech manufacturing industries.

The package comprises 7-year tenor financing, including a $20 million loan funded by ADB, parallel loans of $87 million facilitated by ADB as the mandated lead arranger, and concessional financing of $28 million.

Fully-electric buses made by VinFast at its manufacturing complex in Hai Phong city, northern Vietnam. Photo courtesy of the firm.

Fully-electric buses made by VinFast at its manufacturing complex in Hai Phong city, northern Vietnam. Photo courtesy of the firm.

Gaboury said at that time: “This project delivers a high-impact, sustainable transport solution for Vietnam while helping it meet its climate goals and supporting the growth of climate finance in the region.”

The project includes a technical assistance of $950,000 from the ACFP and the Clean Technology Fund, a global fund that promotes investments to initiate a shift towards clean technologies.

ADB’s Private Sector Operations Department under Gaboury catalyzes, structures, and provides financing to privately and state-sponsored companies across industry sectors throughout developing Asia and the Pacific.

This March, ADB and Monsoon Wind Power Co. Ltd. in Laos signed a $692.55 million nonrecourse project financing package to build a 600-megawatt wind power plant in southern Laos to sell power to neighboring Vietnam.

As sole mandated lead arranger and bookrunner, ADB has arranged, structured, and syndicated the entire financing package, the largest syndicated renewable project financing transaction among ASEAN countries to date.

Gaboury said in an announcement for the financing, “Developing economies in Asia and the Pacific face shortfalls in climate investments that are needed to clear a pathway to green growth.

“The syndication of development and commercial financing for this project bridges this gap by mobilizing private capital to develop wind resources which are translated into clean power generation that can spur economic and social advancement in the region.”

Comments (0)
  • Read More
Maintaining market status upgrade a bigger challenge: official

Maintaining market status upgrade a bigger challenge: official

Vietnam's stock market status will be upgraded by FTSE Russell from "frontier" to "secondary emerging" from September 21 next year, but continued reform is critical as the bigger challenge is to maintain the new classification, said a market watchdog official.

Finance - Sat, October 18, 2025 | 1:30 pm GMT+7

HCMC partners with Nasdaq to develop int’l financial center

HCMC partners with Nasdaq to develop int’l financial center

The Finance Department of Vietnam’s southern metropolis Ho Chi Minh City has signed an MoU with the U.S.-based stock exchange Nasdaq on the development of an international financial center (IFC).

Top News - Sat, October 18, 2025 | 11:56 am GMT+7

Vingroup plans $325 mln issuance of international bonds

Vingroup plans $325 mln issuance of international bonds

Vietnam's leading private conglomerate Vingroup (HoSE: VIC) has announced a board of directors resolution to issue $325 million worth of international bonds, with a five-year term and a yield of 5.5% per year.

Companies - Sat, October 18, 2025 | 10:26 am GMT+7

Vietnam raises personal income tax deductions by over 40%

Vietnam raises personal income tax deductions by over 40%

The Standing Committee of Vietnam’s National Assembly, the country's legislature, on Friday approved a resolution on adjusting personal income tax (PIT) deductions, marking a significant increase of over 40% from current levels.

Economy - Sat, October 18, 2025 | 9:11 am GMT+7

EVN subsidiary spreads the spirit of solidarity, compassion

EVN subsidiary spreads the spirit of solidarity, compassion

The employees of National Power Transmission Corporation (EVNNPT) came together in an inspiring display of unity and compassion in October, each donating one day’s salary to support and express solidarity with the people of Cuba - a nation that has long shared a special friendship with Vietnam.

Companies - Sat, October 18, 2025 | 9:00 am GMT+7

Property fever prompts tighter inspection in central Vietnam's economic hub Danang

Property fever prompts tighter inspection in central Vietnam's economic hub Danang

Chairman of Danang city People’s Committee, Pham Duc An, has ordered a comprehensive inspection and audit of land valuation and auction activities to prevent and address market manipulation that could destabilize the local property market.

Real Estate - Sat, October 18, 2025 | 8:00 am GMT+7

Vietnam mulls opening door for private investment in small modular reactors

Vietnam mulls opening door for private investment in small modular reactors

Vietnam’s Ministry of Industry and Trade has drafted a parliamentary resolution that, for the first time, would allow private companies to participate in the development of small modular nuclear reactors (SMRs).

Energy - Fri, October 17, 2025 | 4:37 pm GMT+7

Kido seeks buyer for remaining 49% stake in frozen food affiliate

Kido seeks buyer for remaining 49% stake in frozen food affiliate

Kido Group (HoSE: KDC), a leading food company in Vietnam, has approved a plan to divest the firm's remaining 49% stake in its affiliate Kido Frozen Food JSC (Kido Foods).

Companies - Fri, October 17, 2025 | 4:25 pm GMT+7

Le Ngoc Quang appointed Danang city's Party chief

Le Ngoc Quang appointed Danang city's Party chief

Le Ngoc Quang, a Party Central Committee member and Party chief of Quang Tri province, has been appointed Party chief of Danang for the 2025-2030 term - the highest position in the city, central Vietnam's economic hub.

Politics - Fri, October 17, 2025 | 4:17 pm GMT+7

T&T Group seeks to reshape north-central Vietnam’s urban landscape with major projects

T&T Group seeks to reshape north-central Vietnam’s urban landscape with major projects

Multi-sector conglomerate T&T Group is developing a model eco-urban complex in Ha Tinh province and plans to build a massive 236-hectare urban area in neighboring Nghe An, with an aim to reshape north-central Vietnam's urban landscape.

Investing - Fri, October 17, 2025 | 2:44 pm GMT+7

Toyota plans $359 mln plant expansion in northern Vietnam

Toyota plans $359 mln plant expansion in northern Vietnam

Toyota Motor Vietnam (TMV) plans to invest about VND9.46 trillion ($359.2 million) in the first phase of its plant expansion project in Phu Tho province.

Investing - Fri, October 17, 2025 | 2:09 pm GMT+7

PVI Insurance sees 9-month profit before tax more than doubling

PVI Insurance sees 9-month profit before tax more than doubling

PVI Insurance has reaffirmed its position as the No. 1 non-life insurer in Vietnam, with total revenue increasing nearly 1.4 times in the first nine months of 2025 and pre-tax profit more than doubling year-on-year - surpassing its full-year targets for both revenue and profit.

Companies - Fri, October 17, 2025 | 9:08 am GMT+7

Vingroup to develop 4,600ha coastal urban project in northern Vietnam

Vingroup to develop 4,600ha coastal urban project in northern Vietnam

A consortium of Vingroup (HoSE: VIC) and its real estate arm Vinhomes (HoSE: VHM) will develop a 4,600-hectare coastal urban complex in Ha An ward, Quang Ninh province, following local authorities’ approval of a zoning plan.

Real Estate - Fri, October 17, 2025 | 8:30 am GMT+7

Indonesia resumes int’l carbon trading after 4-year hiatus

Indonesia resumes int’l carbon trading after 4-year hiatus

Indonesian President Prabowo Subianto has issued a new decree to restart international carbon emissions trading after a four-year hiatus.

Southeast Asia - Thu, October 16, 2025 | 9:23 pm GMT+7

Investors seek 2-year delay for $2.56 bln LNG power project in northern Vietnam, citing equipment hurdles

Investors seek 2-year delay for $2.56 bln LNG power project in northern Vietnam, citing equipment hurdles

Investors of a $2.56 billion LNG-fired power plant in Hung Yen province have proposed delaying the project’s commercial operation schedule by two years due to difficulties securing key equipment.

Energy - Thu, October 16, 2025 | 9:04 pm GMT+7

Vietnam to soon raise taxpayers' personal deduction: official

Vietnam to soon raise taxpayers' personal deduction: official

The personal income tax deduction in Vietnam is "very likely" to increase to VND21.7 million ($823,940) per month, including VND15.5 million (588,530) for the taxpayer and VND6.2 million ($235,410) for each dependent.

Finance - Thu, October 16, 2025 | 6:25 pm GMT+7