Development banker takes on philanthropy fund management

Ahmed Saeed was in the middle of his recently completed almost five-year stint at the Asian Development Bank (ADB) when, in November 2021, he anchored the global launch in Scotland of a groundbreaking approach to how emerging economies could efficiently wean themselves of coal-fired power generators while continuing to push for further development.

This was the Energy Transition Mechanism (ETM), which the Philippines and Indonesia helped unveil during that year’s United Nations Climate Change Conference held in Glasgow.

The ETM—a model that used blended finance to speed up the retirement of coal power plants and develop green, renewable energy to replace them—was rolled out while the world was still tentatively emerging from restrictive measures imposed in response to COVID-19 pandemic.

ADB’s country partnership strategy then, which is being followed up to this year, focuses on infrastructure investment, local economic development and social investments.

As a partner for the ETM, the Philippine government continues to study potentials for using the model on a 300-megawatt power plant in Mindanao owned by the Power Sector Assets and Liabilities Management Corp.

The private sector in the Philippines is quicker to adopt the ETM, with the Ayala group’s Acen Corp. announcing during the months following ETM’s launch that they were using the concept to gather partners and raise funds for their divestment of coal-fired power assets.

As vice president of the Manila-based multilateral lender, Saeed had, on behalf of ADB, expressed appreciation for this demonstration of how the ETM would work. He says that ADB had offered to help Acen in terms of funds, but the Ayala company already had what they needed.

And now, the ETM is gathering momentum in Southeast Asia and big-ticket “high-quality” infrastructure projects in the Philippines are taking off, thanks to the domestic economy’s strong fundamentals.

Saeed says that, for example, the ongoing North Commuter Railway Project (or the $2.75-billion Malolos-Clark link) and the $4.3-billion South Commuter Railway Project (Manila-Calamba link) represent the biggest-ever infrastructure endeavor that the ADB is financing since its founding in 1966.

In the same vein, the ADB is laying the ground for other significant projects for the Philippines, such as the Bataan-Cavite Interlink Bridge that will span Manila Bay and the Laguna Lakeshore Road Network Project from Sta. Rosa to Western Bicutan.

Considering these, the multilateral lender appears ready to follow through that strategy of the past five years, but with a shift in emphasis from pandemic response to the similarly pressing matter of addressing the problem of greenhouse gas emissions.

Country strategy

Currently, ADB is preparing the country partnership strategy for the Philippines covering 2024 to 2029, which the bank says will continue the momentum of support while seeking to reenforce its focus on mitigating the impact of climate change, investing in Filipinos and developing climate-smart infrastructure.

Climate action will be a key strategic priority in the coming years, the ADB says. This will be complemented by knowledge support that will help align interventions toward a stronger climate agenda.

Also, job creation will be a high priority in ADB’s operations, with a focus on facilitating job transitions and upskilling.

According to the bank’s latest profile of the Philippines, ADB will continue to focus on investments that connect communities through infrastructure; raise the country’s climate readiness through mitigation, adaptation and conservation; improve disaster resilience; address skills development and support business and employment recovery; advance social protection; and improve access to health care.

Of course, the picture is not entirely rosy. The ADB observes that the capacity of government agencies to roll out large and complex infrastructure plans “will need to be further strengthened.”

Still, Saeed has encouraging words. “I think unequivocally, the [Philippine] government’s capacity to design, develop, implement and administer large-scale infrastructure is significantly enhanced compared to what it was three decades ago.”

“Part of that has been the government’s own capacity to do that work, and then there remains a constraint around funding that work—a gap that has been filled effectively by this project preparation facility that allows the government to borrow from ADB,” he adds.

 

The next journey

And while Saeed will be home-bound soon, back to his roots in the United States, he is ready to pursue a fresh endeavor while building on the achievements of the past five years. This week is his last as an ADB official.

“I’m going to remain very involved in these issues [and]I’m going to run a new philanthropy that is focused on the climate and on developing countries,” he tells the Inquirer.

Saeed describes this new vehicle, dubbed Allied Climate Partners (ACP), as one that will use philanthropic capital in a new and different way—as an investment subsidy that will help build platforms targeting specific problems.

ACP, which announced last June 6 that Saeed will be getting on board this coming September, describes its mission: to increase the number of bankable, climate-related projects and businesses in emerging markets and developing economies to create significant environmental, economic and social impact.

“The first platform is focused on infrastructure development. We are aggregating $240 million of grant capital to support an $800- million global project development (initiative),” he says.

“The objective is that $240 million should unlock $10 billion on infrastructure investment,” he adds. “The goal is to be extremely catalytic with respect to the use of concessionary capital.”

Saeed says that, similar to ADB, his new organization will be focused on developing economies globally, and on decarbonization-related issues.

Initially, ACP will focus on regions like Southeast Asia, the Caribbean and Central America, Africa and India by funding the junior equity of four initial investment managers in these areas.

Beyond the provision of funds, ACP will also help provide the expertise necessary to increase the number of climate-related projects and asset-oriented businesses.

The group says that such an approach is intended to address a critical financing gap at the early, risk-oriented stages of the development process. Without this support, many projects and businesses struggle to attract the necessary capital to achieve their climate-related goals.

Asked whether ACP will have something in the pipeline that could involve the Philippines, Saeed says he is hoping that this would be the case.

“I have lived for four and a half years in the Philippines and I’d love for us to do something [for this country],” he says.

He opines that there appears to be a dearth of infrastructure projects that are ready for funding in the Philippines more than there is a lack of money to be invested.

“The lack of projects arises both because we don’t necessarily have the skills we need to develop projects [and] also because we haven’t built businesses that focus specifically on that problem,” Saeed says.

“There hasn’t been capital available for that.”

“And so the goal is to build this platform that can in the Philippines, for example, significantly increase the number of projects that are ready for investment actually,” he adds, noting that this is very similar to what ADB does.

‘Sit in the middle’

For his next endeavor, Saeed—a lawyer trained in economics, business administration and diplomacy—is not only drawing on his experiences with ADB. Before joining the bank, he had spent close to eight years as managing director and head of JPMorgan’s coverage for finance ministries, central banks and sovereign wealth funds across the Middle East and North Africa.

He also served in senior roles at the US Treasury, was deeply involved in a number of significant debt relief exercises for countries in the Middle East, and laid the basis for what became the Santiago Principles for sovereign wealth funds.

With ACP, Saeed’s goal is to take the best of the private sector and certain good things from the public sector and put them together.

“So you got the speed, nimbleness, governance, risk-taking capacity of the private sector but we’re philanthropy, so it’s easy to engage ADB or others who because they are public sector entities, they have to be careful when they’re engaged with for-profit. But with a philanthropy, there’s total mission alignment, so you can actually be collaborative,” he says.

“The goal is to try to sit in the middle because I think that there’s a gap there that the public and private sector sometimes have a hard time [bridging]. So if you can create something in the middle that can work with both, maybe you can speed up and remove some of the friction in the system.” INQ

Read Next

Denial of responsibility! SamacharCentrl is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.