ADB to raise $1bn in India via bonds

Asian Development Bank (ADB) is planning to raise $1 billion through bonds in India to provide rupee-denominated loans to public sector undertakings or state government projects.

"We have sought permission from the government to raise one billion dollars. We expect the permission to be granted early this year," ADB Principal Economist (Indian Resident Mission) Narhari Rao told reporters here.

He said the proposal is for a blanket loan, and there is no time-frame for disbursing it. The loans, mostly meant for infrastructure projects, would be disbursed as and when the demand arise, he added.

ADB had sought 'best conditions' for the bonds so that those could be passed on to the borrower, Rao said.

Funds raised through bonds earlier were for private sector project fundings, while the upcoming bonds are meant for the public sector project finance, he said.

ADB will increase the amount of loan approvals to $2.45 billion in India this calender year as against $2.2 billion in 2006, ADB Country Director Tadashi Kondo said.

ADB disbursed $701 million in India last year, and expects to raise it to over $1 billion in 2007, he said.