MANILA -- The Asian Development Bank is launching a program to encourage private companies to develop infrastructure in the region's emerging markets.
Under the initiative, the ADB will offer businesses its expertise on proposing high-quality development plans to governments for public-private partnerships. Initially, the program will cover airports, railways, waterworks and other projects in Southeast and South Asia. The international lender is already negotiating with trading companies and manufacturers in Japan and South Korea concerning such projects. The endeavors are estimated to be worth a total of $5 billion.
Infrastructure demand in Asia amounts to $800 billion a year, but the World Bank and ADB are able to fund only a fraction of that amount. Even with the new China-led Asian Infrastructure Investment Bank in the picture, far more funds are needed to meet the region's needs.
This is why tapping private-sector money is at the top of the agenda for the ADB meeting. The new program is designed to do just that.
The plan is to help companies that are interested in infrastructure development in emerging countries but do not have sufficient knowledge of local laws and institutions. Working with the ADB will also give companies more credibility.
When companies win orders, the ADB will receive commissions. These fees will be payable in shares of the participating businesses.