• PAGE ONE
• INDEX
• HOME

Financing private sector project -- OPEC Fund seeks tie-ups

Our Bureau

NEW DELHI, Dec. 14

THE OPEC Fund, a development financial institution promoted by the OPEC countries, is scouting for collaboration agreements with Indian development financial institutions such as the ICICI, IDBI and the like for extending its funding facility to private sector companies.

The advisor to the OPEC Fund, Mr Rolf B. Westling, while addressing premier trade organisations such as the CII, FICCI and Assocham, said that the ``Fund wants to create an awareness of the additional instrument that it is making available for financing projects undertaken by the private sector.''

The details of the funding arrangements would be worked out with the Union Government, he said, adding that the principles would be similar to that of other multilateral funding agencies such as the IFC or the ADB.

The OPEC Fund, he said, would focus on new grassroots projects as well as expansion and modernisation of existing projects which would also include marketing. Funds would be allocated on individual project basis but through the Indian intermediaries base d on sound banking principles and appraisal of specific projects.

The Fund would also finance commercially viable social projects taken up by private sector companies. Out of its total portfolio, the fund wants to keep its exposure through equity at 35 per cent, while the remaining 65 per cent would be through loans. A lso, 20 per cent of its loans would be in the high risk category and 80 per cent in low risk category.

The OPEC Fund has, till now, funded 12 projects throughout the world through its private sector, which took off in May this year, with a total outlay of $53 million.

The Fund is also open to taking up equity participation in any new financial institution which may be set up for specific needs such as housing, Mr Westling said.