Asian Development Bank (ADB) will maintain its lending levels to India at around $2 billion annually over the next three years, said Takehiko Nakao, president of the bank, amid fears that capital constraints may force the lender to cut lending in the next few years.
ADB’s lending to India will be broad-based with a major focus on rural areas, he said during the closing press conference of ADB’s board of governors meet on Sunday.
Admitting that ADB is facing a resource challenge, Nakao said the bank is exploring options to ensure that lending level remains adequate. ADB plans to lend around $10 billion to its member countries this year.
“The capital needs of ADB is a complicated issue and we must get the views of the board of governors,” he said.
ADB is considering various options to increase its capital base so it can maintain its lending levels, he said, but did not disclose what the options were.
On the possibility of funding projects through equity participation, Nakao said though equity investment is an option, the risks need to be assessed before taking a decision.
On the proposed setting up of a BRICS bank, Nakao said setting up a new bank will be challenging. He, however, said ADB will closely work with the bank, planned to be set up by the grouping of Brazil, Russia, India, China and South Africa, given the huge infrastructure financing requirements in the region.