ADB may pick up 26% equity in Incap

The Asian Development Bank (ADB) is expected to take an equity of not less than 26 per cent in the newly-incorporated Infrastructure Corporation of Andhra Pradesh (Incap), which has an authorised capital of Rs 100 crore.

According to L V Subrahmanyam, vice-chairman and managing director of Incap, negotiations are on with the private lending arm of ADB at the Government of India level for this purpose.

"ADB has expressed its interest to partner with us and a draft agreement may reach us soon," he said, adding that the corporation is willing to offer the entire 50 per cent equity to the agency.

As per the shareholding pattern, the Andhra Pradesh government will hold 40 per cent equity while the state financial institutions including Andhra Pradesh State Financial Corporation (APSFC), Andhra Pradesh Industrial Infrastructure Corporation (APIIC) and Andhra Pradesh Cooperative Bank (Apcob) will have 10 per cent equity participation leaving the remaining 50 per cent to domestic financial institutions and multilateral agencies. Incap's investment would be only in the form of equity or equity-related instruments.

The state government formed Incap in May 2005 with the objective to identify, conceptualise, promote and give advice on infrastructure projects in Andhra Pradesh.

Project preparation, sharpening the framework for infrastructure development, access to long-term funds, administrative support for investors are among the important responsibilities to be handled by the corporation covering all the sectors.

The corporation will charge for its services including project preparation, funding tie-up and other project-specific consultancy from both the government departments and private companies.

The state government has entrusted Incap with the implementation of three huge projects "� Greater Hyderabad Growth Corridor (160-km long outer ringroad project comprising over 20 satellite townships), natural gas grid in the state and development of a multi-modal transit hub using Secunderabad Railway station.

With the presence of the funding agencies like ADB, it would become easier to attract investments for the projects which are in the pipeline, Subrahmanyam said. He did not rule out the possibility of ADB taking part in the proposed outer ringroad project.