ADB to set up Asia-Pacific Infrastructure Fund

Asian Development Bank (ADB) plans to set up an Asia Pacific Infrastructure Fund to cater to the infrastructure financing needs of countries in the region.

India has expressed its keenness to be part of this fund that would have contributions from various Asia Pacific nations, besides the ADB, Rajat M. Nag, Managing Director-General of ADB, said here .

Over the next decade, the infrastructure financing needs of the Asia-Pacific region are estimated at about $8 trillion, he said. Efforts would be made to build a track record for a few years after which the Asia Pacific Infrastructure Fund could issue bonds to investors, he added.

If the bonds are able to get AA rating, then funds (reserves) of various central banks could also be channelised into the Asia Pacific Infrastructure Fund.

“The main challenge is how to use reserves (held by central banks) for infrastructure financing,” Nag said.

A number of countries have been using part of their forex reserves for infrastructure financing. Several models have been adopted for this purpose.

Nag also said that ADB would look to combine the benefits of Asia Pacific Infrastructure Facility with the proposed Asia Pacific Infrastructure Fund.

ADB had few years ago put together an Asean Infrastructure Fund with contributions from Asean member countries. India, however, was not a part of this initiative as it was not a member of this grouping.

If the proposed Asia Pacific Infrastructure Fund becomes a reality, then India could also benefit from such an initiative, said Nag.

>srivats.kr@thehindu.co.in

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