Japan interested in partnering with India to build infra abroad: JICA India chief

Japan’s premier international cooperation and development agency, JICA, is interested in partnering with India in infrastructure projects in Southeast Asia, Africa and the Pacific, said JICA India chief Saito Mitsunori.

He also pointed to JICA’s plans with the newly announced Bay of Bengal Northeast Corridor, which aims to build infrastructure in India and Bangladesh and construct a new industrial value chain.

In an interview Saito also stated that JICA intends to continue funding to Indian private sector enterprises looking to deliver development solutions. He also stated that JICA is interested in finding ways to meet the long term financing needs of the Indian infrastructure sector. Edited excerpts:

JICA mentioned that it was interested in pursuing joint projects in third countries with India. Has there been any progress on this front?

We are still interested in the idea. JICA is open to any proposals from Indian side for joint projects/programs in India’s neighbouring countries or in other regions such as Southeast Asia, Africa and the Pacific.

In March, Prime Minister Kishida announced a new ‘Bay of Bengal Northeast Industrial Value Chain Concept’ to bring infrastructure and manufacturing to the Northeast. Will JICA have a significant role to play here?

JICA has mega-scale development projects which will contribute to realizing ‘Bay of Bengal-Northeast Industrial Value Chain Concept’ on both sides of the India-Bangladesh border. On the Bangladesh side, JICA is financing the development of Matabari’s deep seaport in Cox’s Bazar district in Bangladesh, and the cumulative loan amount to the project has reached 146.8 billion yen. On the Indian side, JICA is financing road connectivity improvement projects in the Northeast region, totaling more than 750km in length and the cumulative loan amount reaching 184.6 billion yen.

From the socio-economic development perspective, the region is often described as “lagging far behind the rest of the country in most important parameters of growth” as is described in the “North Eastern Region Vision 2020 Vision Statement” of Government of India. It can also be recognized as located at a strategically and economically critical juncture between India and Southeast Asia, as well as within the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) countries, which makes India’s Northeast described as a place of convergence of India’s Act East Policy and Japan’s Free and Open Indo-Pacific Policy.

In terms of the development of Northeast region, the remoteness is one of the major challenges they are facing. The improvement of road connectivity and access to the international deep seaport would provide huge opportunity to the region.

At the same time, we recognize that building hard infrastructure is not enough, and for that, JICA is now starting a new study on cross-border logistics improvement in the BBIN nations

How has JICA’s plan to cooperate with the private sector moved in India? Has JICA raised financing private sector projects here and also participated with equity in such projects? How much has JICA committed to private sector projects globally on an annual basis?

JICA has put importance to promote private sector involvement in its development projects in India since long back. For example, JICA has provided policy support loans to Tamil Nadu and Gujarat governments for implementing its investment promotion policies such as infrastructure development in and around industrial parks, human resource development in manufacturing sector, capacity development of relevant government wings etc. Other infrastructure projects including water and sanitation, energy, transportation have also formulated and implemented keeping in mind that these projects would encourage more investment from private sector in the future.

When it comes to the recent development, I would like to explain about increase of the projects under the scheme of Private Sector Investment Finance. Apart from the scheme of G to G, such as ODA loan, Grant, Technical cooperation, JICA has a scheme called as PSIF. Across the globe, JICA has committed more than $5 billion so far and committed $1.1 billion last fiscal year. JICA is aiming to expand the PSIF more and more. India is the one of the largest countries of JICA PSIF operation. In India, we have 7 PSIF projects including 5 bank loan projects supporting MSME, affordable housing, clean energy, gender equality and agriculture supply chain and 2 fund investment such as Rebright Partners 4th fund and Neev 2nd fund supporting social entrepreneurs. In India, many entrepreneurs are solving the problems on ground by their business with innovative technologies and intelligence. We will continue to support those companies to make difference in India.

Is JICA looking to invest in road InvITs, especially those promoted by NHAI? Is JICA also looking at meeting long-term financing needs of the Indian infrastructure sector, especially road and shipping?

We do not have any discussion with NHAI regarding InvITs so far. But we are indeed looking at meeting long-term financing needs of the Indian infrastructure sector.