ADB Focuses On Building Infrastructure In Asia Pacific

Jakarta, May 6 (Antara) - The Asian Development Bank (ADB) reiterates its commitment to stay focus on financing infrastructure projects in Asia Pacific region with the hope it will increase connectivity and trade in the region, ADB`s President Takehiko Nakao said. "Infrastructure is important to achieve an inclusive growth and eradication of poverty in Asia pacific," he stated in a press release received here on Monday. Apart from single-handedly financing infrastructure projects, he said, ADB will also actively deal with other parties tobecome co-financier for the projects. The ADB`s president also noted the inclusive growth issue is also important to be addressed considering an increase of development gap in a country and among countries in the region. He added that inclusive growth is also among issues that`s important to be addressed considering the increase of development gap either in a country and among countries in the region. "Inclusive growth and empowerment will always be our motivation to operate in this region. we are also concern about gender equality issue," Nakao added. Earlier ADB`s Vice-President for Private Sector and Co-financing Operations Lakshmi Venkatachalam said Asia needs a robust bond market that can match the financing requirements of huge infrastructure projects in the region and the growing appetite for long-term assets among local pension and insurance companies. "Pension funds, insurers, sovereign wealth funds and other holders of long-term money could provide a real shot in the arm for private infrastructure investment, particularly through bond markets. The problem right now is that the project risk profiles and investors` risk appetite are largely not matched," he said. Beyond a handful of active countries and sectors, infrastructure project financing in Asia remains under-developed and under-served � despite the region�s significant savings. The economic slowdown in Europe and pressure from Basel III have curtailed the risk appetite of international banks, while banks in Asia are too focused on their own markets, and only for favored sectors such as oil, gas, and power. Banks in the People`s Republic of China and India are among the most active project finance players in their home markets. Last year, ADB approved a first-of-a-kind $128 million (Rs7.168 billion) facility, developed with India Infrastructure Finance Company Limited (IIFCL). ADB and domestic finance companies will provide partial guarantees on rupee-denominated bonds issued by Indian companies to finance infrastructure projects. ADB will then assume part of that guarantee risk in the expectation that the initiative will free up bank loans for redeployment into new projects, channeling more funds for public infrastructure bonds in India, international bonds for Indian projects, and even for projects beyond India in the near future. Another encouraging sign for the public finance market is that Asian governments are now more receptive to the concept of public-private partnership, and are lining up rigorously selected and better-designed infrastructure projects for possible financing. In the meantime, international financial institutions are expanding their activities and products towards private infrastructure finance to help fill the current gaps.