FM asks ADB to develop special vehicle for infra financing

Finance Minister P Chidambaram today sought support of the Asian Development Bank (ADB) to creating special vehicles for financing infrastructure in India.

“We would like to see ADB support the development of innovative special financing vehicles to support the expansion of infrastructure finance,” Chidambaram said in his intervention at the Business Session during ADB Board of Governors meeting.

He said ADB could explore credit enhancements of infrastructure projects bonds for road funds and municipal bond issuances in order to expand the finance available for transportation and urban infrastructure.

ADB has partnered with India Infrastructure Finance Company Ltd for providing the facility that would help infrastructure bond issuers to enhance their credit ratings and attract investments from insurance firms and pension funds.

The finance minister invited the multilateral institution to carry out an in-depth exploration of how it could employ its expertise in energy, logistics, urban, and skills development around economic corridors such as Delhi-Mumbai Industrial Corridor, Chennai-Bengaluru and Mumbai-Bengaluru corridors.

“ADB can not only partner in these efforts but also actively pursue the potential of a corridor linking India, Bangladesh, Myanmar, Asean and China,” he said.

The finance minister also said that to give a push to its regional cooperation initiatives, ADB should ensure that the funds for the regional projects are given to the participating countries as an additionality, over and above the country support programme.