ADB keen to raise India lending upto $3 bn, says Nakao

Asian Development Bank (ADB) is keen to enhance its lending to India to $3 billion this year to support ‘robust growth’ in the country.

“We have started expanding the pipelines. During the last visit in March, I discussed how we can increase lending to India. India needs more infrastructure funding and we are  happy to do this to support more robust growth in India,” ADB President Takehiko Nakao said at the annual meet here. The bank plans to increase its lending to $3 billion this year as against about $2.2 billion in 2015 on sovereign side, he said.

If private sector lending is included it could go up to $3.5 billion, he said adding that lending will also increase to $4 billion in the subsequent year.

Since 1986 when ADB started lending operations in India, ADB has approved 197 sovereign loans totalling $33.1 billion. As on December 31, 2015, the portfolio included 84 ongoing sovereign loans amounting to $11.4 billion.

With regard to scaling up operations of the ADB, Nakao said, “We also completed a strong replenishment of ADF 12 for the period 2017–20 earlier this week here in Frankfurt. I take this opportunity to thank the 32 donors for their generous contributions, despite difficult fiscal situations in some of your countries.”

The contributions from emerging Asian economies have increased to 11.7%, compared with 6.9% during the ADF 11 period.

The new ADF comes with a number of innovative features, including a doubling of the minimum allocation for small countries, strengthened support for disaster risk management, and regional health security, he added.

On the capital increase, he said, the bank may need raising this in the future but there is no concrete proposal at the moment.

“We should consider seeking a capital increase in the medium term to respond to the huge and growing financing needs and to reflect changing economic circumstances in the region,” he said. Emphasising that the bank will give priority to fragile and conflict affected countries, he said, ADB will continue to help create quality jobs, paying attention to good working conditions.

“We will further deepen our work on gender equality in our operations. We are increasing our support for health and education sectors. We will continue our work on social protection, including effective conditional cash transfers,” he said.

With regard to climate change, he said, the bank is committed to double financing for this to USD 6 billion by 2020 from the current level of USD 3 billion.

Strategy 2030 will help define approach to the Sustainable Development Goals and COP21.

It will also elaborate on our approaches to upper middle-income countries and regional cooperation and integration, he added.