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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 into 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 such as bonds,” said Sunil Motiwal, CEO, SAARC Development Fund (SDF).

He was addressing the SDF Partnership Conclave being held to rope in top institutions such as 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, said Motiwal.

Established in 2010 by heads of eight member states, the Thimpu-headquartered SDF has so far completed a financial closure of $73.75 million, of which, $47 million has 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.

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