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Big-lender ADB offers to guide insurance sector, capital market in transition period

With 12 per cent of funds from the Asian Development Bank being pumped into India, the premier lending agency has offered to provide technical assistance for private investments and help prepare sectors like insurance and capital markets in their transition towards globalisation, Richard Simson, senior investment officer of the ADB said in New Delhi on Thursday.

''We would like to lend our support to restructuring of the capital markets programme and be an advisor to the Insurance Regulatory Authority,'' he said.

''We are also looking for new opportunities in power, roads, ports, water supply, waste disposal, environment, telecom and urban infrastructure,'' Simson said at the Delhi annual session of the Confederation of Indian Industry, northern region.

Some of the areas where the ADB was recently involved are liquefied natural gas projects in Petronet, British Gas, Dahej, Cochin and Pipavav.

The current approved investments are for 21 projects worth $ 248 million, of which 17 are equity ($ 102 million), nine debt ($ 146 million).The asset allocation is nine in the Indian industry worth $ 98 million, four in infrastructure worth $ 106 million and capital markets numbering nine worth $ 44 million.

Meanwhile, the Asian Development Bank has prepared a fresh loan sanction of $ 1.3 billion to be utilised for the country's oncoming five energy projects, Frank J Polman, resident representative of the ADB said.

The energy projects are power transmission project ($ 250 million), Gujarat Power ($ 300 million), Madhya Pradesh Power Development ($ 300 million), Energy Efficiency Support Project ($ 200 million) and Power Finance Corporation ($ 250 million).

Martin Endelman , cofinancing officer of the ADB outlined some of the important characteristics of the bank's guarantees today. ''The ADB always requires a government counter-guarantee in the case of public sector projects as well as private sector projects. Although procurement financed under loans guaranteed by the ADB need not follow our strict international competitive bidding procedures, there must be transparent competition, and the goods and services procured must come from our member-countries,'' Endelman said.

The other characteristics of the bank's guarantees are no stand-alone guarantees, risk sharing principle, non-accelerable loans by the lenders where the ADB's guarantees may not be accelerated by the lenders, and finally irrevocable and unconditional guarantees.

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