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Asian Development Bank
The Asian Development Bank (ADB) is a multilateral development bank dedicated to reducing poverty in the Asia-Pacific region by means of sustainable economic growth, social development and good governance. Established in 1966, it is owned by 67 member countries, mostly from the region. Canada is the second-largest shareholder of ADB's non-regional members and, overall, its seventh-largest shareholder.
In 2007, the ADB approved US$10.11 billion in loans, US$672.7 million in grants, and US$243.4 million in technical assistance. This also generated US$1.11 billion in direct, value-added co-financing from partnership operations.
The ADB's main financial instruments are loans, technical assistance and grants. Most lending is in the public sector, primarily for large infrastructure projects. The Bank also provides technical assistance grants and loans to developing member countries so they can hire consultants to help identify and prepare development projects.
ADB infrastructure lending is, for the most part, in the following sectors:
- agriculture and natural resources;
- energy, including electric power, oil and gas, and renewable energy;
- the environment, including water supply, waste treatment and environmental management;
- information technology and telecommunications; and
- transportation, including road, rail, marine port and airport projects.
The ADB's Country Partnership Strategies (CPS) are prepared with the borrowing country's participation. This takes the form of consultation with the government and with other country stakeholders, including civil society, non-government organizations, the private sector and other development agencies.
A CPS is based on an analysis of the borrower's development priorities and its poverty reduction programs, and is consistent with ADB's strategic priorities. The CSP is normally aligned with the borrower's planning cycle, which usually covers a period of five years.
ADB Country Partnership Strategies can be found on the individual country pages of the ADB website.
Strategy 2020 is the ADB's new long-term strategic framework, which will cover the period from 2008 to 2020. This framework will serve as the ADB's institution-wide planning document and will give the ADB a more relevant and innovative role in shaping the region's future. Strategy 2020 will refocus ADB operations on the three development agendas of economic growth, environmentally sustainable growth and regional integration.
ADB's project cycle has the following five stages:
Country Partnership Strategy: The ADB works with the developing member country to define its CPS, as described above in the "Country Strategies" section.
Identification and preparation: The ADB consults with the executive level of the borrowing country to identify potential projects and programs. To help the government identify feasible projects, ADB often provides Project/Program Preparatory Technical Assistance (PPTA) grants.
Appraisal and approval: The ADB conducts an appraisal mission to the country to assess the project's feasibility. Following the field assessment, the appraisal mission conducts further field studies, analyses and consultations as required. A loan proposal report and a draft loan agreement are prepared.
Once the appraisal is finished, the draft loan agreement and draft program proposal are submitted to the involved parties for their review. After collecting all the feedback, the ADB begins negotiations with the borrowing government.
Following these negotiations, the loan proposal is submitted for approval to the ADB's Board of Directors. This document is known as the Report and Recommendation of the President (RRP). After the Board approves the loan, the RRP and its associated legal agreements are posted on the ADB website.
Next, the RRP is sent to the borrowing country's government for cabinet authorization. Once this is obtained, the loan agreement is signed by the ADB's President and the representative of the government.
The ADB's legal counsel and Project Officer then review the agreement to make sure it meets all required conditions. If it does, the loan is formally declared effective. Loan documents normally allow 90 days for the loan agreement to become effective.
Implementation: ADB-assisted projects are implemented by the executing agency according to the agreed schedule and procedures. A project administration memorandum sets out the project's implementation agreements and details.
Evaluation: After the project facilities and technical assistance activities are completed, the ADB prepares a project completion report or technical assistance completion report that documents how the implementation proceeded. These reports are prepared within 12 to 24 months of the completion of the project.
ADB-financed procurement must follow the ADB's rules for procurement of goods, civil works and the use of consultants. The executing agency in the borrowing country is responsible for all aspects of the procurement process. For technical assistance projects funded directly by the Bank, the procurement process is the responsibility of the ADB, although some projects may be delegated to the executing agencies.
ADB procurement principles are as follows:
- Sources of procurement: Proceeds of a loan can be used only for procurement of goods and works supplied from, and produced in, member countries of the ADB.
- Economy and efficiency: To achieve economy and efficiency, contracts are to be procured through international competition unless other forms of procurement are more suitable and have been agreed upon between the ADB and the borrower.
- Fairness: Procurement procedures must give member countries adequate, fair and equal opportunity to compete for contracts.
- Transparency: Transparency is essential in the procurement process to achieve economy and efficiency, and to combat fraud and corruption.
Project and Procurement Information
The chief entry point for project and procurement information is the Opportunities page of the ADB web site. The Projects section has links to a great deal of information about procurement plans, project documents and the design and monitoring frameworks that are established when a project is being prepared. Procurement Notices are published by country on the ADB website.
Suppliers of Goods, Works and Non-Consulting Services
The ADB requires that borrowers use the International Competitive Bidding (ICB) method for procuring equipment and civil works. This process is normally open to all eligible suppliers and contractors, although preferences are sometimes allowed for domestically manufactured goods and, where appropriate, for domestic contractors.
When bidding on large and complex civil works contracts, turnkey contracts, and contracts for expensive and technically complex plant and equipment, contractors must prequalify using the Standard Procurement Document for Prequalification of Bidders (SPQD). Prequalification allows the ADB to make sure that a company has the experience, track record and human and financial resources to be a potentially successful bidder.
Other bidding documents available on the ADB website are for goods, works (large contracts), works (small contracts) and plant. They can be accessed via the ADB Procurement Documents web page.
The ADB uses the following bidding procedures for ICB procurement, as described on the Bidding Procedures page:
- single-stage, one-envelope bidding;
- single-stage, two-envelope bidding;
- two-stage, two-envelope bidding; and
- two-stage bidding.
As well as ICB, the ADB also uses the following procurement methods:
- limited international bidding;
- national competitive bidding;
- shopping;
- direct contracting;
- force account;
- procurement from specialized agencies;
- procurement agents;
- inspection agents;
- procurement under loans to financial intermediaries;
- procurement under private-sector arrangements;
- performance-based procurement;
- procurement under loans guaranteed by the ADB;
- community participation in procurement; and
- procurement under disaster and emergency assistance.
For detailed information about the ADB procurement process, refer to the ADB Procurement Guidelines.
Consultants and Consulting Services
ADB provides an integrated Consultant Management System (CMS) for registering and maintaining profiles of both consulting firms and individual consultants. Consultants must be registered on CMS to be considered for a contract. Companies and individual consultants that have previously registered in the older DACON database do not need to re-register.
Recruitment of consultants for technical assistance (TA) contracts is normally the responsibility of the ADB, although in some cases this may be delegated to the borrowing government. Direct responsibility for recruitment is shared between the project user division and the Central Operations Services Office (COSO). For TA grants of less than US$600,000, the project user division undertakes the recruitment activities; for TA grants above US$600,000, COSO plays a more central role. The main funding sources for ADB-financed consulting services are project loans, TA grants and the ADB's own administrative budget.
Individual consultants and consulting firms should submit an Expression of Interest (EOI) if they want to be involved in a project. For projects in which the borrower is responsible for recruiting consultants, EOIs are normally sent directly to the project office of the executing agency. For consulting services recruited directly by ADB, interested firms can submit their EOI electronically via the Consulting Services Recruitment Notices (CSRN) page on the ADB website. Consultants may send additional hard copy of their EOI should they wish to do so.
The ADB has six basic principles for the use of consultants:
- Consulting services should be of high quality.
- Engagements should be economical and efficient.
- All qualified consultants should have the opportunity to compete for assignments.
- The ADB aims to develop and use consultants from its developing member countries.
- The selection process should be transparent and should not involve conflicts of interest.
- Good governance and ethical behavior are especially important.
The ADB uses six methods for selecting teams of consultants for its own use:
- Quality- and Cost-Based selection (QCBS);
- Quality-Based Selection (QBS);
- Fixed-Budget Selection (FBS);
- Least-Cost Selection (LCS);
- Consultants' Qualification Selection (CQS); and
- Single-Source Selection (SSS)
For more information on ADB's policies on the use of consultants, refer to the following documents:
- Guidelines on the Use of Consultants by ADB and Its Borrowers
- Consulting Services Operations Manual
- Project Administration Instructions (PAI)
The Canadian Cooperation Fund on Climate Change was established at ADB in 2001. The Fund operates at the programming and policy level to help ADB's developing member countries reduce greenhouse gas emissions and manage and mitigate the effects of climate change.
The objectives of the project are to:
- finance project preparation and capacity building through technical assistance targeted on renewable energy and energy efficiency;
- assist projects related to climate-change policy mechanisms, including the Global Environment Facility and the Clean Development Mechanism;
- support activities consistent with evolving international rules regarding the use of official development assistance in the Clean Development Mechanism;
- support carbon sequestration and adaptation to climate change; and
- fund technical assistance for the provision of policy advice, project preparation, training and institutional support.
