Honorable Chief Guest, Vice Prime Minister Mr. Vu Van Ninh, Mr. Nguyen Quang Dung, Chairman, Board of Management, VDB, Distinguished Delegates, Colleagues in Development Banking, Ladies and Gentlemen,
A very pleasant and good morning to you all!
On behalf of the Association of Development Financing Institutions in Asia and the Pacific or ADFIAP, I wish to welcome you all to the 38th ADFIAP Annual Meetings set in this idyllic and beautiful resort city of Nha Trang!
First of all, I wish to express our sincere gratitude to our Honorable Chief Guest, Vice Prime Minister, Mr. Vu Van Ninh, for making time to join us today for this opening ceremony. Thank you, Vice Prime Minister Vu Van Ninh.
Please allow me also to thank Chair Nguyen Quang Dung for his kind and generous support as this conference would not have been possible without his and his institution, Vietnam Development Bank’s hosting this event here. So, thank you very much, Mr. Nguyen.
I wish also to extend our thanks and appreciation to all officers and staff of VDB who have worked tirelessly and exceptionally hard to host us here in Nha Trang. Thank you, everyone, for all your efforts.
Our appreciation also goes to all the speakers, members and guests who came all the way from other countries to be here with us, to meet and greet one another, to learn from each other, and to work together toward a sustainable future for development banking.
The theme of this year’s conference, “DFIs & Sustainable Infrastructure: Policy Framework, Operational Best Practices and Challenges” aims to highlight the important role of development finance institutions in financing and advancing sustainable infrastructure in their respective countries and to develop and undertake innovative solutions to the growing need of infrastructure in this part of the world.
Ladies and gentlemen, when we talk about sustainable infrastructure, it is the word, “sustainable” that makes the term more challenging. On the wider context, the word, ‘sustainable’ includes the whole spectrum of environmental, social, economic and governance dimensions. When these dimensions are included in infrastructure development and financing, it indeed makes sustainable infrastructure efforts much, much more challenging.
Former ADB President, now Bank of Japan Head, Mr. Haruhiko Kuroda, mentioned that one of the major factors behind Asia’s rise has been its commitment to investment in infrastructure and regional connectivity which has facilitated its international trade and foreign direct investment.
The widespread economic growth expected over the period up to 2030 will be associated with rapid growth in trade, especially within Asia and between major regions, says the OECD. However, the current infrastructure which is key to connectivity is simply not enough, adds the OECD.
Across all of Asia, the need for infrastructure finance is around US$750 billion per year for funding energy, transport, telecommunications and water & sanitation projects, according to estimates by the ADB Institute.
Asia’s economic growth and trade competitiveness depend on efficient and reliable infrastructure. Factories cannot function without electricity; goods cannot be moved without roads, railways and ports; coordination is not possible without communication facilities. As such, inadequate infrastructure is a bottleneck to ongoing growth, a threat to competitiveness, and an obstacle to poverty reduction.
Based on the joint survey conducted in 2011 by the World Bank and the World Federation of DFIs, of which ADFIAP is a founding member, close to 70% of the DFIs surveyed said that they provide financial assistance to the infrastructure sector. Transportation, energy and housing, logistics and shipping, in that order, are the main focus of the DFIs’ infrastructure finance portfolio. And about half of them are loans to businesses involved in public-private partnership (PPP) arrangements. And that infrastructure finance only represents less than 25% of the DFIs’ total loan portfolio.
The foregoing survey results present an opportunity for DFIs to consider developing and increasing its portfolio in infrastructure finance. Obviously, this opportunity also poses a challenge to raise funds, to re-tool the staff, to review risk management parameters and to develop a more creative financial approach to infrastructure projects, among others.
In this regard, ADFIAP, as a focal point of DFIs engaged in the financing of sustainable development in the Asia-Pacific region, has lived by its mission and mandate. The four “pillars” of ADFIAP’s work and advocacy center on access to finance for micro, small and medium enterprises, on tackling environmental issues through green/climate finance, on alleviating poverty through financial inclusion and social finance, and on adherence to good governance principles and practices.
At this annual meeting, we will exchange ideas and share experiences on these issues and more – a lot of ground to cover in such a short time.
In closing, I do hope that we will all benefit from these personal and professional exchanges and interactions with one another. But let us also have the time here to celebrate our work and achievements amid this beautiful setting that Nha Trang and our kind host, VDB, have to offer!
Thank you very much for your kind attention.