ADB to raise $1 billion via bonds in India

Our Banking Bureau
16 January 2007

Asian Development Bank plans to raise raise $1 billion through bonds in India to provide rupee denominated loans to finance infrastructure projects being undertaken by public sector undertakings and state governments.

Narhari Rao, ADB's principal economist (Indian resident mission) told reporters, "We have sought permission from the government to raise $1 billion. We expect the permission to be granted early this year."

He said the proposal was for a blanket loan without any time frame for disbursing it and the loans, mostly meant for infrastructure projects, would be disbursed as and when the demand arose.

ADB has sought 'best conditions' for the bonds, which would be passed on to the borrower, since the funding is intended for public sector project finance, unlike earlier, when funds were raised through bonds for funding private sector projects.

Tadashi Kondo, ADB country director, said ADB would increase the amount of loan approvals for India to $2.45 billion in 2997 against $2.2 billion in 2006 and taking it by 2009 to $2.85 billion.

It expects to cross the $1-billion disbursal mark in India in 2007, against $701 million in 2006.