Tunis – February 2013

ADF-13: Financing Framework and Long-Term Financial Capacity Charles Boamah

Vice President, FNVP

Tunis - 22 February 2013

Tunis – February 2013

1 755 1 912 2 489

3 562 3 787 438 638

1 200

2 063 2 007

0

1 000

2 000

3 000

4 000

5 000

6 000

ADF : Growing support for Africa’s neediest

In Million UA

2,193 2,550

3,689

5,625 5,794

ADF-8 ADF-9 ADF-10 ADF-11 ADF-12

Donor Subscriptions Internally Generated Resources

Tunis – February 2013

Self-adjusting mechanisms built into the ACA model minimize the risk of over-commitment

950

1 443

1 452

1 894

Impact of new interest rates

Impact of new cancelation policy

ADF-13 ACC

Potential ADF-13 ACC with dated parameters Million UA

Million UA

Million UA

Million UA

Tunis – February 2013

Measures to improve financial performance

Enhanced Liquidity Management – ACE Portfolio

Mitigation of currency translation losses

Continued stringent cost controls and budgetary discipline

…But more needs to be done

Tunis – February 2013

Inclusiveness

In line with ADF priorities

Strengthening financial capacity

AHIDI Index UNDP

education and health component

of HDI

ADB’s Africa Infrastructure Development

Index

-

0,50

1,00

1,50

2,00

2,50

3,00

Current Terms AHIDI Differentiation

ACC Level

+36%

ADF-13 ADF-16 ADF-13 ADF-16

In Billion UA

Differentiated and hardened lending

terms commensurate with economic

situation and debt sustainability

Tunis – February 2013

Management carefully reviewed and explored all alternatives to boost ACC in ADF-13

950 990 1 021 1 157 1 198

0

200

400

600

800

1 000

1 200ACC Level

+40 +71

+207 +248 In Million UA

Low scenario Accelerated Repayment

Timely MDRI

payments

Shorter 4 year

encashment Calendar

Voluntary Prepayment

Tunis – February 2013

Leveraging ADF Resources

Loans & Grants Default Loss Guarantee

Partial Credit Guarantee

DFI Facility Mod.Fram. Assistance

Private Sector MF

4 x 4 x 6 x

9 x

3 x 1 x

5 x average leverage

Increase capacity of ADB to fund projects in

LIC

Protect commercial lenders against default

by government

Strengthen the capital position of DFI and Improve

their cost of funding

ADB provides volume of ADF PBA allocation to creditworthy countries

Boost PPP/private sector investments in small

countries and LICs

Leveraging impact of new financing instruments

Tunis – February 2013

• Low : subscriptions increase by the SDR inflation rate

• Consolidation : flat real growth in total ADF resources

• Transformation : 10% real growth in total ADF resources

Indicative Financing Framework

3 787 4027 5185 5771

2007 950

1018 1052

0

1 500

3 000

4 500

6 000

7 500

Subscriptions ACC

In Million UA ADF-13 Pipeline

ADF-12 Low Consolidation Transformation

Tunis – February 2013

What do we expect from Deputies today?

Item for Decision/Item for Endorsement Management’s Proposal

Exchange rate reference period : February 1 to July 31 2013

Standard Encashment Calendar : 10 Year as in ADF-12 or shorter calendar

Replenishment Technical Gap : 5%

Advance Commitment Capacity : Core Assumptions

Accelerated Encashment : Fully Hedged Proposal

Differentiation :

AHIDI plus Debt Sustainability Analysis

Regular : from 50/10 to 40/10

Advance : from 50/10 to 40/5

Blend : from 30/8 to 30/5

Additional measures to enhance financial sustainability :

Accelerated repayment clause and voluntary repayment framework

Decisions / Endorsement at this February meeting

Tunis – February 2013

What do we expect from Deputies today?

For guidance now and decision in the June meeting

• Innovative financing instruments

• Indicative financing framework

Tunis – February 2013

ADF-13

Enhancing ADF's financial integrity and capacity increases its relevance for Africa