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SAARC Development Fund (SDF), the umbrella financial institution for projects in SAARC member countries, is working on a road map to strengthen its credit portfolio and tap the financial market, before converting itself to a full-fledged SAARC Development Bank, a top official said.
“Our strategy is to convert the SDF into a regional bank in the near future. Right now, the focus is to strengthen our credit portfolio; once we have a lender’s status then we can raise funds from the capital market through various instruments like bonds etc.”, said Dr Sunil Motiwal, CEO of SAARC Development Fund (SDF) in the capital.
He was addressing the SDF Partnership Conclave being held to rope in top institutions like the World Bank, Asian Development Bank and the Asian Infrastructure Investment Bank (AIIB).
With an authorised capital of $ 1.5 billion and a total capital base of $ 500 million, the SDF is working to enhance its credit portfolio to $ 300 million in the next few years by financing a range of projects including renewable sources, transportation, telecom and environment in the SAARC region, Motiwal said.
Established in 2010 by heads of eight member states, the Thimpu-headquartered SDF has so far completed financial closure of $ 73.75 million of which $ 47 million have already been disbursed.
Motiwal said that his interactions with senior officials of World Bank, ADB and AIIB have shown that these multilateral institutions are quite keen to take up jointly with SDF projects in South Asia, particularly relating to infrastructure sectors.
According to a World Bank study, the South Asia Region needs to invest between $ 1.7 trillion and $ 2.5 trillion to close its infrastructure gaps mainly in energy, power, transportation, telecom and environment.
When asked by a former career diplomat Veena Sikri as to how the SDF intends to achieve financial connectivity amongst the eight SAARC members, Motiwal said, “We are in touch with 40 local banks from the member states. Some of them like the SIDBI have formalized MoU’s with SDF”.
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