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African Development Bank afdb/opev

Independent Review of the Bank’s Non-Sovereign Portfolio: Preliminary Findings on Private Sector Policy. Rakesh Nangia Mohamed Manai OPEV. African Development Bank www.afdb.org/opev. Overview – Strategic Priorities. Infrastructure, Industry & Service Sectors. DFI Partnerships.

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African Development Bank afdb/opev

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  1. Independent Review of the Bank’s Non-Sovereign Portfolio: Preliminary Findings on Private Sector Policy Rakesh Nangia Mohamed Manai OPEV African Development Bank www.afdb.org/opev

  2. Overview – Strategic Priorities Infrastructure, Industry & Service Sectors DFI Partnerships Intermediary Support LIC’s Fragile States MSME’s Strong Growth Financial Equity Risk Sharing Instruments Portfolio Quality Operational Efficiency Political Risk Member Support Government Exposure Limits Social Cautious Growth Environment Risk Rating Targets Household 2

  3. To What Extent is the PSO Portfolio Aligned to the Strategy’s Five Objectives? • Improving the Investment Climate • Objective fits with “one bank” concept of integrated operations

  4. To What Extent is the PSO Portfolio Aligned to the Strategy’s Five Objectives? 2.Supporting Private Enterprises • Need to define SME’s and require DO monitoring • Interventions through intermediaries and DFI’s have tradeoffs: • Positives: financial additionality, reduced risk exposure • Concerns: loss of control over funds usage, limited ability to monitor and impact DO, different priorities between PSO and client financial institutions • Increasing equity fund investments reach SME’s, create high additionality • Strong concerns: far greater risk exposure, need for additional monitoring and management, lack of defined exit strategies, overall coordination

  5. To What Extent is the PSO Portfolio Aligned to the Strategy’s Five Objectives? • 3. Building Competitive Infrastructure • Very high catalytic effect • 43% achieved in LIC’s, a strategic priority • Higher risk ratings than overall portfolio • Limited use of TA on infrastructure project • Portfolio strongly aligns to core objective and multiple priorities • Targeted TA utilizing WB Group model can reduce risk exposure, improve outcomes

  6. Approval Stages (1 of 4) • Approval process stages are similar to benchmarked MDBs, but AfDB’s internal steps are more cumbersome • AfDB has twice as many approval gates as other MDBs • Gating stages during the approval process

  7. Approval Stages (2 of 4) • Repeating approval steps between Concept Review and Final Review is more detailed than other IFI’s, adds time and administrative requirements • Other IFIs utilize Board notification on smaller projects and finish approval steps within division management/OPSCOMM reviews • Gating stages during the approval process

  8. Finalize Technical Draft Reports by End Of November • Discuss Draft Consolidated Report by Mid-December • Submit Consolidated Report and Final Technical Reports for Management Response by End of December • Submit Consolidated Report and Final Technical Reports to CODE for Consideration by End of January 2013

  9. Thank you

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