ADB to launch $1 bn energy initiative

The Asian Development Bank (ADB) will be launching a $1 billion energy efficiency initiative this year as a part of its effort to support the energy efficiency measures being adopted by its member countries, according to ADB President Haruhiko Kuroda.

Replying to questions following his lecture on "Investing in Infrastructure: Key to Economic Growth" at the Administrative Staff College of India here on Thursday, Kuroda emphasised the need for adopting energy efficiency measures in Asia, particularly in a "fast growing country like India".

Stating that the demand for energy in Asia would increase "exponentially" in the next 10 to 15 years, he said the agenda of the bank's 39th annual meeting to be held in Hyderabad in May this year would include aspects pertaining to the role of ADB in assisting Asian countries in achieving efficiency in energy utilisation.

He is on a three-day official visit to India to review the arrangements being made for the ADB's board of governors meeting to be held here from May 3.

In the Indian energy sector, Kuroda said, ADB was working with the Power Grid Corporation to strengthen the national transmission grid, and with central power utilities to help increase hydro power capacity.

"Our state power sector loans focus on upgrading transmission, distribution, rural electrification and capacity building of power sector institutions," the ADB president said, adding that the specific aim of this work was to reduce system losses and improve collection of bills.

Kuroda said the bulk of ADB's ongoing operations in India as well as the proposed programme for 2006-08 focused on the three core areas of transport, urban and energy infrastructure.

In transport, ADB was now working with the National Highway Authority of India to see how best the bank could help with the subsequent phases while attracting private participation and investment on a build-operate-transfer basis.

In the urban sector, he said ADB's 2006-08 programme would continue with projects that would help upgradation of infrastructure of select cities in the states of the North East, Jammu and Kashmir, Rajasthan and Uttaranchal. The bank would also assist the government in implementing the National Urban Renewal Mission.

Disclosing that several borrowers in India's infrastructure and financial sectors have indicated a desire to borrow long-term rupees from ADB, Kuroda said the bank would also explore the scope of expanding local currency lending in consultation with the government.

He said hundreds of millions of Indian people remained poor even though rapid economic growth in the country during the past decade had led to a decline in the incidence of poverty.

Consequently, India would not reach many of the non-income Millennium Development Goals (MDGs) for maternal mortality rates, infant mortality rates or gender parity in secondary enrollment ratios within the stipulated time frame of 2015.

"Since India accounts for nearly 16 per cent of world population, this would imply that the world as a whole will fall short of attaining the MDGs", Kuroda said.