India is the largest borrower from Asian Development Bank (ADB). Between 1986, when ADB started its lending operations in India, and 30 June 2014, ADB approved 183 sovereign loans totaling $29.8 billion. ADB has also approved 50 non-sovereign loans, equity investments and guarantees totaling more than $3.2 billion.
ADB President Takehiko Nakao met with India's Prime Minister Narendra Modi and Finance Minister Arun Jaitley and stressed that ADB is committed to partnering with India in reigniting growth and reducing poverty. He promised that ADB will help India accelerate infrastructure development, boost manufacturing, improve the skills of young people to enhance their employability, expand trade through regional cooperation, and promote private sector activities.
Mr. Nakao said ADB's operations for India will maintain high levels of lending, amounting to a total of $7 billion-$9 billion over the next three years. ADB will also provide around $30 million for technical assistance grants, especially for building institutions and capacity at the state and local levels.
ADB will support the government's vision to boost manufacturing through economic corridors. It will be a partner in the development of the East Coast Economic Corridor (ECEC) that will run from Kolkata in West Bengal to Tuticorin in Tamil Nadu. ADB is working with the Ministry of Industry and Commerce and state governments on the first phase of the ECECthe Vizag Chennai Industrial Corridorwhich is expected to play a key role in boosting trade with East and Southeast Asia.
Mr. Nakao said, "ADB is not thinking in terms of one-off investment projects. Instead, it will first analyze economic conditions of the region, examine what types of industries have potential to grow, and consider infrastructure and regulatory requirements that will allow these industries to blossom."
ADB is providing loans to state governments to train young people for modern jobs. Further, its ongoing technical assistance to the National Skills Development Corporation will help establish stronger linkages between private industry and technical and vocational training using public-private partnerships (PPPs).
ADB is supporting India's first concentrated solar power plant in Rajasthan, power distribution systems in New Delhi, and providing credit guarantees of infrastructure project bonds. ADB has also made equity investments in off-grid solar power in rural areas, agribusiness, and renewable power. ADB has been supporting PPP projects through technical assistance and financing through Indian banks. "We will expand ADB's PPP operation in India through our newly established PPP office at our headquarters," said President Nakao.
To finance rupee denominated lending in private sector projects, ADB last week issued its first offshore Indian rupee-linked bond and raised Rs3 billion (about $50 million). This is a part of ADB's $500 million offshore rupee-linked bond program and is expected to help deepen India's capital markets.