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ADB 2017 Operations Reach $28.9 Billion

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Asian Development Bank (ADB) operations—comprising approvals of loans and grants, technical assistance (TA), and cofinancing—reached $28.9 billion in 2017 in its continued efforts to help meet Asia and the Pacific’s development needs, according to preliminary figures released today.

Approvals of loans and grants from ADB’s own resources reached a record $19.1 billion, representing a 9% increase from the $17.5 billion seen in 2016. This puts ADB well on its way to meet its $20 billion target by 2020. Of the total, nonsovereign (primarily private sector) operations accounted for $3.2 billion, a 26% increase from $2.5 billion in 2016. TA, meanwhile, increased by about 22% to $205 million from $169 million in the previous year.

Commitments (the amount of loans and grants signed)—ADB’s new performance measure—reached $20.1 billion. This is a significant increase from $13.3 billion in 2016, reflecting the signing of large projects approved in 2016 and 2017.

“The strong figures for ADB operations in the past year were supported by the successful merger of ADB’s concessional Asian Development Fund lending operations with the Ordinary Capital Resources balance sheet—which took effect at the start of 2017,” ADB President Takehiko Nakao said. “This will allow us to deliver a much higher level of assistance to our developing member countries for years to come without seeking a capital increase.”

A highlight of ADB’s operational figures for 2017 is climate financing, which reached a record $4.5 billion (comprising mitigation $3.6 billion and adaptation $0.9 billion), a 21% increase from 2016. This puts ADB in a good position to achieve its $6 billion climate financing target by 2020.

Cofinancing approvals declined to $9.5 billion in 2017 from the $13.9 billion recorded in 2016, partly due to the delay of large expected cofinanced projects. Disbursements were $11.7 billion in 2017, compared to $12.7 billion in 2016. This is because of lower approvals, and hence disbursements, of policy-based lending and counter-cyclical support facility, among other factors.

“Disbursements are essential to make a difference on the ground. Cofinancing and catalyzation is a much-discussed strategy in the international community to realize the Sustainable Development Goals,” said Mr. Nakao. “ADB will come up with additional concrete measures to increase disbursements and cofinancing, building on the new procurement policy approved in April 2017 and ongoing efforts to leverage resources.”

Among ADB’s other operational highlights were projects that combine finance with innovative approaches to development, including satellite data and remote sensing to improve irrigation in Indonesia and Pakistan, pilot testing of climate-smart agriculture practices in Bangladesh, and supporting social welfare reforms in Mongolia to promote human development.

An innovative $100 million TA loan to the Philippines, approved in October 2017, will help the government prepare and deliver infrastructure projects under its Build Build Build program.

On the funding side, ADB offered new and innovative thematic products such as the health bond and gender bond. This is on top of increased efforts to raise local currency funding to meet the growing demand for nonsovereign local currency loans. ADB’s Indonesian rupiah bond in December was the first bond issued from a multilateral development bank of which Indonesia is a shareholder.

ADB launched three high-impact publications in 2017. Meeting Asia’s Infrastructure Needs estimated Asia and the Pacific’s annual infrastructure needs at $1.7 trillion per year until 2030. A Region at Risk: The Human Dimensions of Climate Change in Asia and the Pacific put forward scenarios of the devastating effects of climate change. The ADB history book, Banking on the Future of Asia and the Pacific focused on the region’s economic development, the evolution of the international development agenda, and the story of ADB over 50 years.

To scale up the bank’s operations with quality, the ADB Board approved the 2018 budget totaling $672.3 million, an increase of 3.9% over 2017, comprising 2.2% price growth and 1.7% volume growth. This budget supports the ongoing investments in IT reforms and organizational resilience. ADB continues to make its utmost efforts at staff optimization and efficiency measures.

A key priority for ADB in 2018 is to finalize its new corporate strategy, Strategy 2030. ADB’s 51st Annual Meeting of its Board of Governors will be held in Manila again in May after 6 years. Strategy 2030, the impact of technological change and globalization on jobs, aging and longevity dividends, role of women entrepreneurs, and private sector participation in infrastructure development will be among the topics discussed. ADB expects more than 3,000 participants to attend the meeting.

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Energy News

IEA holds Energy Efficiency Training Week in Paris

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Dr Fatih Birol, the IEA's Executive Director (second from right), kicked off the event by stressing the importance of energy efficiency as the first fuel. Photo: IEA

The International Energy Agency is hosting its 11th Energy Efficiency in Emerging Economies Training Week from 20 to 24 May. More than 120 energy efficiency professionals from 40 countries have come together in Paris for the event.

The objective of the training week is to enable participants to learn from leading experts in the field and from each other, strengthening the knowledge and networks needed to meet some of today’s most pressing challenges. The weeklong activities focus on the critical role of energy efficiency in mitigating growing energy demand across all sectors in the world’s fastest‑growing economies.

Dr Fatih Birol, the IEA’s Executive Director, kicked off the event by stressing the importance of energy efficiency as the first fuel. “Many of the challenges the world is facing today – climate change, energy security, access to electricity – can be met at a large scale only by implementing the right energy efficiency policies,” he said.

Ambassadors from Brazil, Switzerland and the United Kingdom joined Dr Birol in the open plenary session to share their experiences and support for the training week. His Excellency, Mr. Carlos Márcio Cozendey, Ambassador and Delegate of Brazil to International Economic Organisations in Paris, commended the opportunity that the training week presents. “Energy efficiency will remain very important in Brazil, and international cooperation through the IEA and bilateral cooperation with different countries will be an important part of that,” he said.

Participants are engaged in one of five parallel courses, which focus on energy efficiency in buildings, industry, appliances and equipment, cities, and indicators and evaluation. Experts from the IEA are guiding participants through an interactive agenda, with lectures, discussions, practical exercises, site visits and group activities.

The IEA will host its first Energy Efficiency Training Week for Africa later this year and a specialised training programme on green buildings in Singapore from 16 to 18 July. Please keep an eye on our website for registration opening dates.

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EU Politics

Aviation Strategy for Europe: Commission signs landmark aviation agreements with China

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The European Union and China have today signed an agreement on civil aviation safety and a horizontal aviation agreement to strengthen their aviation cooperation.

The agreements follow up on the EU-China Summit of 9 April and will serve to boost the competitiveness of the EU’s aeronautical sector and enhance overall EU-China aviation relations. This marks yet another key deliverable under the Juncker Commission’s Aviation Strategy for Europe – designed to generate growth for European business, foster innovation and let passengers profit from safer, cleaner and cheaper flights.

European Commission President Jean-Claude Juncker said: “In an increasingly unsettled world, Europe’s partnership with China is more important than ever before. The EU firmly believes that nations working together makes the world a stronger, safer and more prosperous place for all. Today we took a first big step in this direction by signing two aviation agreements with China that will create jobs, boost growth and bring our continents and peoples closer together. Today’s agreements show the potential of our partnership and we should continue on this path of cooperation. For it will always be in unity that we find strength.”

Commissioner for Transport Violeta Bulc said: “China is one of the European Union’s most important strategic partners and we attach a lot of importance to our excellent relations on transport matters. We are mutually interested in better connecting Europe and Asia and making it easier to move goods, services and people between Europe and China. That applies to aviation, too. Today’s agreements will boost the European Union’s trade in aircraft and related products, and ensure the highest levels of air safety.

The main objective of the bilateral civil aviation safety agreement (BASA) is to support worldwide trade in aircraft and related products. This agreement will remove the unnecessary duplication of evaluation and certification activities for aeronautical products by the civil aviation authorities, and therefore reduce costs for the aviation sector. The BASA will also promote cooperation between the EU and China towards a high level of civil aviation safety and environmental compatibility.

The second agreement signed today is a so-called horizontal aviation agreement. It marks China’s recognition of the principle of EU designation, whereby all EU airlines will be able to fly to China from any EU Member State with a bilateral air services agreement with China under which unused traffic rights are available. Up until now, only airlines owned and controlled by a given Member State or its nationals could fly between that Member State and China. The conclusion of a horizontal agreement will thereby bring bilateral air services agreements between China and EU Member States into conformity with EU law – a renewed legal certainty which will be beneficial to airlines on both sides.

Next steps

Both the European Commission and the Chinese transport administration will now proceed with their respective internal procedures to put the conclusion of the agreement in place.

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Environment

World Bank to Strengthen Human Capital and Climate Resilience in Haiti

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The World Bank’s Board of Executive Directors approved today three projects for a total amount of US$162 million in grants to improve the quality of health and education services and strengthen climate resilience in Haiti.

“These three projects address key national priorities to build a better future for all Haitians,” said Anabela Abreu, World Bank Haiti Country Director. “Access to quality healthcare and education are crucial to break the cycle of poverty and to build a stronger human capital so that Haitian children can reach their full potential. The Bank support will also help build climate resilience in the face of the growing threat of natural hazards by strengthening early warning systems and disaster preparedness in high climate risk areas.”

Globally, Haiti ranks 112th on the World Bank Human Capital Index. A child born today in Haiti will be only 45 percent as productive when she grows up as she could be if she had enjoyed full health and education. Infant mortality in Haiti remains high with 59 death per 1,000 live births and maternal mortality has increased from an estimated 523 per 100,000 live births in 2005 to 646 per 100,000 live births in 2016. Only 40 percent of children are fully vaccinated, which has contributed to outbreaks of preventable diseases such as cholera, diphtheria, and measles.

Similarly, the education outcomes are not very promising. On average Haitian children attend 11.4 years of school by age 18, which is equivalent of 6.3 years of adjusted learning and is the lowest score in the region. In terms of disaster risks, Haiti is highly exposed to hurricanes, floods and earthquakes. Between 1976 and 2012, losses associated with hydro-meteorological events alone were equivalent to almost two percent of annual GDP on average. In 2016, Hurricane Matthew affected over two million people, resulting in over 500 deaths and displaced 175,000 people.

The “Strengthening Primary Health Care and Surveillance in Haiti” project will significantly enhance basic healthcare services for three million people, particularly for pregnant women and children in the South, North West, North-East, Center and Nippes departments. It will strengthen nationwide surveillance capacity and immunization for infectious diseases. The project will also improve the overall coordination among government and international partners in the health sector. The US$70 million project is financed by a US$55 million grant from International Development Association (IDA) and a US$15 million grant from the Global Financing Facility.

The second approved grant for the “Providing an Education of Quality in Haiti” project is to increase enrollment and improve the school learning condition in public and private primary schools in the Southern departments of Haiti. The project will particularly focus on closing the gender gaps in attendance and retention rates.  The support is provided as an additional financing of US$57 million, including a US$39 million grant from IDA and a US$18 million grant from the Global Affairs Canada.

The third project “Strengthening Disaster Risk Management and Climate Resilience” will support the design of a national early warning system and improve emergency response and evacuation capacity of targeted municipalities in high climate risk-prone areas. It will also reinforce infrastructure such as schools and community centers to serve as emergency shelters, provide technical training, and support for strengthening the building codes. The project is financed by a US$35 million grant from IDA.

The International Development Association (IDA) is the World Bank institution that provides low-interest or interest-free grants and loans to the world’s poorest countries to help them implement projects and programs that stimulate economic growth, contribute to the reduction of poverty and improve the living conditions of the poor.

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