The Asian Development Bank (ADB) is looking at an offshore fund raising plan linked to the Indian rupee to help finance infrastructure projects in India, a senior official of the multilateral development bank has said.
“We are in talks with the Reserve Bank of India on this…It will most likely be an offshore one,” Narhari Rao, Deputy Country Director, ADB’s India Resident Mission, said here on Wednesday.
Asked about the quantum of proposed fund raising, he said the quantum, timing and the nature of instrument have not been decided as yet.
He, however, confirmed that ADB was looking at an offshore issuance that would be rupee linked and the funds mobilised abroad could also be used to support private developers of infrastructure projects here.
In 2004, ADB had floated onshore rupee denominated bonds to raise Rs 400 crore from the domestic market here.
The ADB plan to look at an offshore fund raising programme linked to rupees comes close on the heels of International Finance Corporation, a member of World Bank Group, raising $160 million in the US from its first offshore sale of rupee bonds.
IFC’s bonds were offered in US dollars, but its returns will be rupee linked.
Rao said that the Government had suggested to ADB to consider issuing offshore bonds linked to rupee.
The Government had in recent months taken several steps to boost dollar inflows into the economy so as to help finance a current account deficit, which is estimated to be lower than $70 billion this fiscal.
Rao also made it clear that any rupee-linked offshore funds raised by the ADB will be part of the $2-billion annual loan assistance (sovereign) that the Manila-based development bank will offer to India from 2013-17.