Ports and water transport will remain an important focus of ADB transport lending in future. Water transport can offer efficient, lower emission transport solutions for long-distance freight and passenger traffic. This is particularly so when water transport investments are supported by improved logistics facilities and services to offer effective multimodal transport solutions that combine the comparative advantages of the different modes.
“To address climate change in transport, through the ADB Sustainable Transport Initiative, we plan to expand operations for developing competitive long-distance water transport projects in developing member countries.”
The bank takes a critical look at the economic and financial implications of a proposal and will only support projects with a financial rate of return that exceeds the weighted average cost of capital.
“Projects must also have clear development impacts and/or demonstration effects that go beyond the benefits captured in the financial rate of return. Such impacts are, however, captured in the economic rate of return, which normally must be 12% or more for projects presented to the Board of Directors,” says Mr Yang.
The bank sees its main role as “stimulating and catalysing other private investments”, and always takes a minority stake in overall financing.
For private sector port projects, ADB can provide loans, equity and loan guarantees.