Private cos don't need govt okay for ADB funding

NEW DELHI: Domestic private companies may now have easy access to funds from Asian Development Bank (ADB). The finance ministry has said that private companies do not require the government���s approval for getting financial support from ADB.

The move may see ADB funding private firms for mega infrastructure projects such as airports development, power projects and road projects. ���Domestic private firms do not require the government���s approval before approaching the ADB for financial assistance. They are only required to keep us informed,��� a senior official in the finance ministry said.


Few private Indian firms have, so far, approached the multi-lateral development finance institution for financial assistance, fearing unnecessary governmental interference. ADB has recently started offering financing facilities, both in terms of loans as well as equity participation, to private firms in infrastructure and financial sectors.

In ���05, ADB approved $1.3-bn projects in India, which included two private sector projects. It funded mostly infrastructure projects in the country. Amongst private sector beneficiaries, prominent companies are Infrastructure Development Finance (IDFC) and Yes Bank. It provided $50m to IDFC and $23m to Yes Bank.

The ADB has also committed itself to funding infrastructure projects in the private sector. Its objective is to meet the financing needs and to raise efficiency of infrastructure projects. The bank also provides technical consultancy and mobilises long-term capital from domestic and international institutional investors.

ADB is involved in financing power projects in the country. India intends to rope in the bank for financing five ultra mega-power plants of 4,000 MW, each of which will need an investment of Rs 15,000-20,000 crore.

India hopes to ramp up its borrowings from Manila-based Asian Development Bank (ADB) from the current $1.2bn to $2bn annually to fund infrastructure projects. India has so far taken $14bn credit from ADB, of which it is a founding member with 6.38% share and has voting power of 5.4%.