Bangladesh Early Warning Update

Asian Development Bank Business Opportunities: Volume 6, May 2008

Monday, June 30, 2008

This Bulletin is a periodic electronic update from the Bank Information Center to inform civil society about Asian Development Bank (ADB) projects in Bangladesh before they are approved by the Board of Directors of the ADB. This Update covers project information, organized by sectors. The information is compiled directly from ADB’s Business Opportunities.

For feedback on the Early Warning Update or to subscribe, please contact:
Bank Information Center
Phone: +1-202-737 7752; Email: southasia@bicusa.org; Web: www.bicusa.org

For more information on specific projects, please contact the following at the ADB:
The Project Officer (contact details listed against each project). When emailing, also copy to: disclosure@adb.org. You may also contact the ADB Public Information and Disclosure Unit (See: http://www.adb.org/Disclosure/contact.asp).

About Business Opportunities (BOp)

Business Opportunities (BOp) identifies potential projects that are under consideration for ADB financing. The BOp listings do not guarantee that financing will be approved for particular projects. However, BOp listings serve as important tools for monitoring and follow up of proposed projects. These, along with your country’s Country Partnership Strategy (CPS), work as early warnings on the projects that your government and the Bank are considering for funding. Advocacy and campaigning experience around the world on Bank projects indicates that the earlier civil society gets involved on proposed projects, the greater the likelihood for impacting them. Proposed projects are listed until the point of ADB Board approval; the remaining are dropped from the list. BOp listings are prepared after CPS approval and during the early phases of Project Preparation. For better understanding of this process, the Bank’s Project Cycle is summarized below.

Project Cycle (ADB website for complete project cycle)

ADB’s Project Cycle

Project Identification/Preparation: ADB often provides grants called project/program preparatory technical assistance (PPTA) to help the government identify and prepare feasible projects. The summary is made available in the form of a project profile or project information document (PID).

During the early stage of the PPTA, an initial poverty and social assessment is conducted to identify people who may be beneficially or adversely affected. A technical assistance report is prepared as a recommendation for ADB to finance a technical assistance project.

If the project requires resettlement of people or might adversely impact the environment, or indigenous peoples, certain safeguard assessments are prepared during this stage. The results of these assessments are to be made available to affected people. For more information on community rights under ADB safeguards and international best practices, see comparative matrices of MDB safeguard policies on BIC's website.

Project Examination: ADB examines project feasibility, first through a fact-finding mission and then through an appraisal mission. The fact-finding mission examines the project's technical, financial, economic, environmental, marketing, and management aspects and potential social impact. Detailed project risks and sensitivity analyses are carried out to assess viability of the proposed project and loan terms are discussed.

Following this, the Appraisal Mission conducts further field study, analyses and consultation, as required. The mission then prepares a loan proposal report and draws up a draft loan agreement for negotiation. After appraisal, the draft loan agreement and draft project proposal is submitted for review. Government is then called for negotiation with ADB. After negotiations with the government, the loan proposal is submitted to Board of Directors for Approval, through its Report and Recommendation of the President (RRP).

After Board approval, the document is sent to the borrowing country's Government for cabinet authorization following which the loan agreement is signed. The loan takes effect once certain conditions are met. The requirements and deadline for loan effectiveness are stipulated in the loan agreement.

ADB-assisted projects are implemented by the executing agency according to the agreed schedule and procedures as detailed out in the project administration memorandum. Implementation time generally ranges from two to five years but depends on the type and nature of the project. ADB's review missions assess the progress of project implementation by visiting it at least twice a year throughout the implementation period.

If a project has significant environmental or social issues, ADB will often require the borrower to submit regular monitoring reports, in addition to progress reports. Information on the project's implementation progress and status of development objectives and loan covenants is added to the project information document during this implementation phase.

For more information, refer to: Unpacking the ADB: A Guide to Understanding the Asian Development Bank

Commonly Used BOp Acronyms

TA: Technical Assistance

AOTA: Advisory and Operational Technical Assistance Loans

PPTA: Project Preparatory Technical Assistance

RETA: Regional Technical Assistance

EIA: Environmental Impact Assessment

IEE: Initial Environmental Examination

N: New Project

R: Revised (italic text indicates change from previous month)

ADB Environmental Categorization

Category “A” Projects: Projects having severe environmental impacts are categorized as “A”. An EIA is required.

Category “B” Projects: Projects having some adverse environmental impacts are categorized as “B”. An IEE is required in order to determine whether an EIA also needs to be done. If not, then the IEE is the final environment document.

Category “C” Projects: Projects havening no environmental impacts are categorized as “C”. No IEE or EIA is required but environmental considerations are still reviewed.

Category “F1” Projects: Projects involving a financial intermediary or equity investment are classified as “F1”. The financial intermediary will apply an environmental management system if environmental impacts are expected.

Current Business Opportunities for Bangladesh

Education /Technical, Vocational Training, & Skills Development
Project Name	(N) Skills Development
Project Type and ID	LOAN: \BAN 39408-01
Executing Agency	Ministry of Education
Loan Amount (US$ million)	50.00
Date of First Listing	31 January 2008
Objectives and Scope	Outcome: Strengthened capacity of the TVET system to provide market-responsive, short-term relevant skills training to more Bangladeshis, including those who have not completed Class VIII. Output: Enhanced relevance and access of TVET programs, improved capacity for good quality TVET delivery, and increased delivery of relevant skill training, including to the poor, women and disadvantaged groups. Impact: The Project's impact will be the increased engagement in wage- and self-employment of skills training graduates. The Project supports the Government's NPRS to reduce poverty and promote economic growth by providing market-relevant skills training to more Bangladeshis, including the poor and the disadvantaged.
Environmental Assessment	Category C
Project Processing Stage	SRC Completed : 30 January 2008
Project Officer	Leah C. Gutierrez (632-4113), Operations Evaluation Division 1; lcgutierrez@adb.org

Multisector
Project Name	Public-Private Infrastructure Development Facility - PPIDF (linked to NSP 41928-01) [former Infrastructure Financing Devt Facility]
Project Type and ID	LOAN: BAN 40517-01
Executing Agency	To be determined.
Loan Amount (US$ million)	185.00
Date of First Listing	12 July 2007
Objectives and Scope	One of the key constraints to economic growth in Bangladesh is its infrastructure deficiencies brought about by stagnant public investments which is largely attributable to the very low level of government revenue collection. Furthermore, Bangladesh, from a regional cooperation point of view, is not fully utilizing its potential in becoming a transport and transshipment hub for the sub-region and the inadequate infrastructure in place limit the country's opportunities for economic integration with its neighbors. Domestic private investment in infrastructure has been limited due to the dearth of long term financing for such investment. Despite the GoB's continuous effort to attract private sector investments, sufficient private commercial financing is not yet available because of various factors, including low rating of debt, a general perception of high cost of doing business in the country, and the absence of creditworthy public sector entities. The proposed Facility will help address these constraints by providing scarce long-term debt financing for private sector sponsored infrastructure projects. As per the lending policy of IDCOL, the proposed Facility will provide loans covering up to 40% of the project cost while the project sponsor will be required to invest a minimum of 20% of the total project cost as equity thereby achieving a better risk sharing between the project sponsor and the government via IDCOL. The proposed facility will therefore play a catalytic role in attracting other commercial funding sources in filling up the financing gap as commercial banks and domestic capital markets are currently not able to provide enough long-term project financing. The project will facilitate and catalyze public-private partnership (PPP) projects, mobilize private sector capital and expertise for infrastructure development, and ease the burden of infrastructure investment on the public sector budget of the GoB. The project will facilitate and catalyze public-private partnership (PPP) projects, mobilize private sector capital and expertise for infrastructure development, and ease the burden of infrastructure investment on the public sector budget of the GoB.
Environmental Assessment	Category FI
Project Processing Stage	Fact-Finding Mission Completed : 26 October 2007
Project Officer	Peter Marro (632-5193), Governance, Finance and Trade Division, SARD; pmarro@adb.org

The Bank Information Center (BIC) partners with civil society in developing and transition countries to influence the World Bank and other international financial institutions (IFIs) to promote social and economic justice and ecological sustainability. BIC is an independent, non-profit, non-governmental organization that advocates for the protection of rights, participation, transparency, and public accountability in the governance and operations of the World Bank, regional development banks, and IMF. For more information about BIC, see www.bicusa.org.

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