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India Gazette
3 days ago
- Business
- India Gazette
ADB President announces $10 billion for India's urban infrastructure
New Delhi [India], June 1 (ANI): Asian Development Bank (ADB) President Masato Kanda has committed up to USD 10 billion, including third-party capital, for India's urban transformation, including metro extensions, new regional rapid transit system (RRTS) corridors, and urban infrastructure and services. This is a five-year initiative, ADB said in a statement on Sunday. 'Cities are engines of growth,' ADB President Kanda said after meeting Prime Minister Narendra Modi here in the national capital. 'ADB will mobilize capital, accelerate delivery, and scale solutions that keep India's urban economy moving and people thriving on the road to Viksit Bharat @ 2047,' the ADB President added. The five-year plan includes sovereign loans, private sector financing, and third-party capital. 'Had a wonderful meeting with Mr. Masato Kanda, in which we shared perspectives on a wide range of issues. India's rapid transformation over the last decade has empowered countless people and we are working to add further momentum in this journey!' PM Modi wrote in a post on X after meeting the ADB President. The initiative is anchored by India's flagship Urban Challenge Fund (UCF), which ADB is supporting to attract private investment for urban infrastructure. Completed analytical work on growth hubs, creative city redevelopment, and water and sanitation upgrades in 100 cities across India is laying the groundwork for the UCF. ADB is also committing USD 3 million in technical assistance to design bankable projects and strengthen the capacity of states and urban local bodies. India's towns and cities are projected to house more than 40 per cent of the population by 2030. ADB has already worked with more than 110 cities across 22 states on water supply, sanitation, housing, and solid-waste management projects, and the active urban portfolio totals 27 loans worth USD 5.15 billion. On urban transport, over the past decade, ADB has committed USD 4 billion for metro projects and RRTS covering 300 kilometers in eight cities, including the Delhi-Meerut RRTS, Mumbai Metro, Nagpur Metro, Chennai Metro, and Bengaluru Metro. During his India visit, Kanda also met Finance Minister Nirmala Sitharaman to discuss expanding metro networks including transit-oriented development (TOD), supporting rural prosperity, scaling rooftop-solar capacities, and operationalizing the UCF. In addition, he met Housing and Urban Affairs Minister Manohar Lal to map next steps for channelling private capital into urban projects, replicating ADB-backed urban transport successes on new corridors, and creating TOD opportunities. Kanda visited the ADB-supported Delhi-Meerut RRTS corridor, India's first RRTS, and spoke with women whose livelihoods have improved through project-linked training. In Gurugram, he visited the renewable-energy company ReNew to discuss stronger collaboration in renewable energy, followed by a roundtable with chief executives from infrastructure, finance, agriculture, and social sector firms. In that meeting, he emphasized that India's private sector can provide the scale and dynamism needed to drive India's growth. Under ADB's country partnership strategy for India, 2023-2027, it stands ready to provide more than USD 5 billion in financing each year, including about USD 1 billion in non-sovereign operations to catalyse additional private investment. ADB began operations in India in 1986. As of April 2025, it had committed USD 59.5 billion in sovereign lending and $9.1 billion in nonsovereign investments. The active sovereign portfolio comprises 81 loans totaling USD 16.5 billion as of April 2025. Founded in 1966, the multilateral development bank ADB is owned by 69 members--50 from the region. (ANI)


Express Tribune
23-04-2025
- Business
- Express Tribune
$1b foreign loan deal reached
Listen to article Pakistan and two foreign commercial banks have reached an understanding for a $1 billion loan at an interest rate of around 7.6%, which Islamabad is obtaining on the back of Asian Development Bank (ADB) guarantee due to its low credit rating. The final term sheet and loan disbursement are subject to the approval of the ADB's $500 million guarantee, which the board of the Manila-based lending agency will approve on May 28. Pakistan can borrow up to $1.5 billion foreign commercial loan against the $500 million guarantee, said government sources. Ministry of Finance spokesperson Qumar Abbasi did not respond to a question on whether an understanding had been reached between the government and two foreign commercial banks for the ADB-backed $1 billion loan. Sources said that the government had negotiated a $1 billion loan for five years. It will be the first foreign commercial deal to be signed for a period of five years, which would reduce refinancing risks. The deal is being negotiated with the Standard Chartered Bank (SCB) and the Dubai Islamic Bank (DIB), said finance ministry officials. They said that the country would pay interest rate equal to the Secured Overnight Financing Rate (SOFR) plus 3.25%. This translates into roughly 7.6%, which is a floating rate and will change with fluctuations in the SOFR. The foreign commercial banks will complete procedural formalities after the approval of ADB guarantee next month. The government expects that the loan will be disbursed in the second half of June, which will also boost its foreign exchange reserves before the end of the current fiscal year. Pakistan's gross reserves stand at $10.6 billion, which the government wants to increase to over $14 billion by the end of June. The reserves will rise on the back of better-than-expected remittances, $1 billion in new commercial loan and $1.3 billion worth of refinancing of Chinese loans, the sources said. The ADB will charge a nominal upfront fee for giving the guarantee. Despite a recent rating upgrade, Pakistan's credit rating still remains low at B negative, which is two notches below the investment grade. Fitch upgraded Pakistan from a substantial default risk to a high risk of default rating. Finance Minister Muhammad Aurangzeb held a meeting with Moody's credit rating in Washington and briefed them on Pakistan's fiscal and current account surpluses, declining inflation, stable exchange rate, and foreign reserves. Discussions also covered the Panda Bond initiative, with both sides agreeing to explore future collaboration. Moody's is expected to improve Pakistan's rating in the first week of May. In September last year, the government had accepted the term sheet of SCB, London, for two loans totaling $600 million at the highest interest rate of around 11%. After a story appeared in The Express Tribune, the government deferred the deal until improvement in the overall macroeconomic conditions. Pakistan's external sector has stabilised and the current account deficit projection has been slashed from $3.7 billion to just $400 million by the IMF. This has reduced the foreign loan requirement. For the current fiscal year, the government has budgeted $3.8 billion in foreign commercial loans but so far it has received about $500 million, mainly arranged by a local commercial bank due to the low credit rating. Saudi Arabia has also not yet disbursed $100 million per month under the deferred oil payment facility due to procedural delays on part of Pakistan. Pakistan and Saudi Arabia had signed a $1.2 billion loan deal for buying oil on deferred payments two and a half month ago. Islamabad will pay 6% interest on the loan that it will use to buy crude oil from the kingdom. The monthly utilisation is capped at $100 million. Finance Minister Muhammad Aurangzeb on Tuesday met Sultan bin Abdulrahman Al-Murshid, CEO of the Saudi Fund for Development (SFD), on the sidelines of World Bank-IMF annual meetings. "Aurangzeb requested the expedited disbursement of funds under the Saudi oil facility, assuring prompt submission of oil shipment documents," said a statement issued by the Ministry of Finance. The oil facility became effective a few days ago after Aramco and two Pakistani oil refineries signed the operational deal. However, these refineries have not yet submitted shipment documents. The finance minister requested the Saudi Fund for Development to give a loan for the construction of N-25 highway in Balochistan, the Ministry of Finance stated. Last week, Prime Minister Shehbaz Sharif imposed an additional levy of Rs8 on every litre of petrol and Rs7 on diesel to fund the N-25 highway. The N-25 starts from Karachi and ends at Chaman border. The government expects to raise Rs120 billion by putting the additional burden on every user of petrol and diesel. For the current fiscal year, the government has budgeted $23.4 billion in foreign loans, including $13 billion worth of rollovers by China, Saudi Arabia, the United Arab Emirates and Kuwait. Pakistan has paid back a $1.3 billion Chinese commercial loan on the understanding of getting it refinanced soon. Aurangzeb also held a meeting with Deutsche Bank and expressed Pakistan's interest in returning to financial markets, including the issuance of Panda and ESG bonds, based on the country's improved macroeconomic stability and credit rating.