ADB to set up Asia-Pacific Infrastructure Fund

NEW DELHI: Manila-based based Asian Development Fund (ADB) today said it is planning to set up Asia Pacific Infrastructure Fund focussed on financing projects in the region.

"We are now looking at a Asia Pacific Infrastructure Fund basically for infrastructure investment in Asia-pacific. It is still in making. We are still working on it," ADB Managing Director General Rajat M Nag said here.

Once created, the fund would pick up debt in infrastructure projects like transport, electricity, water supply and sanitation.

There will be no rupee element to it, he said, adding, it be sizeable enough to make a difference.

The idea is to make the fund attractive enough for countries in the region to join, other bilateral funding agency and developed country to make equity participation in the fund.

Over time this fund could issue dollar denominated bond in its own name, he said.

Meanwhile, the World Bank group member IFC has raised Rs 1,000 crore ($160 million) from the US through the first- ever offshore sale of rupee bonds.

The offering, which was oversubscribed by two times, is a part of the lender's $1-billion offshore rupee bond programme.

It is a three-year bond offered and settled in USD, but IFC will convert the proceeds from dollars to rupees on the domestic spot exchange market and use the money to finance its investments in the country.

Talking about India growth stroy, Nag said "worst is behind us. We do see some positive things happened recently."

On the monetary policy side, steps taken are encouraging, while on the fiscal front investments are picking up with the Cabinet Committee on Investment (CCI) clearing stalled projects, he added.

He also said that 4.7 per cent is the reasonable target for the fiscal deficit and the current account deficit estimate of $56 billion is realistic would be achieved with exports picking up and gold demand coming down.

Recently, ADB aggreed to provide loan of $2 billion annually for five years till 2017 to India to create jobs, enhance investment reforms, and improve infrastructure.

The resource envelope for sovereign operations is about $2 billion per year for the next five years and India will remain ADB's largest single country borrower, he said.