Asian Development Bank (ADB), traditionally strong in funding social sector projects in education, water and irrigation in India, is moving into financing metro rail projects in the country in a big way.
“Transport and energy are two of our biggest areas for funding. We’re now moving into metro rail financing in a big way,” said Hun Kim, Director General, South Asia Department, ADB. He was addressing journalists from South Asia at the 52nd Annual Meeting of the ADB.
The bank is involved with the $1 billion Mumbai metro, and is in talks with the respective State governments for funding the Bhopal Metro and Bengaluru Metro. It is also engaged in discussions to extend assistance to Chennai Metro Phase II — possibly even subsequent phases — and the new Indore metro.
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Funding for the Mumbai project is the largest extended to India by the ADB, said Diwesh N. Sharan, Deputy Director General, South Asia Department. ADB has financed the Jaipur Metro as well. The bank is also working with the Centre to finance the newly-announced Delhi-Meerut Rapid Rail project cleared by the Cabinet in February.
Mr. Kim emphasised that financing logistics projects would also be a priority area for the bank. “We want to be a bank for logistics,” he said, pointing to the Vizag-Chennai and the Chennai-Kanyakumari industrial corridors, where the ADB is involved in financing the preparation of the master plan.
Tamil Nadu is emerging as a major ‘client’ of the bank. “We will be lending $500 million each for energy projects, and urban projects, apart from the Chennai Metro Phase II,” Mr. Kim said.
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He said that all these projects had been agreed to in-principle with the Centre, the guarantor. “It depends on the client,” he said, adding that delays often happened at the borrowers’ end.
The ADB is working closely with the AIIB, which is “still in the initial phase” of its operations, and has raised a lot of funds to on-lend.
(The correspondent is in Fiji at the invitation of ADB)