 "SAARC Development Fund plans to tap markets; become regional bank")
SAARC Development Fund (SDF) plans to tap financial markets as it aims to become a full-fledged regional development bank in the near future, its CEO Sunil Motiwal said today.
With an authorised capital of $1.5 billion and a total capital base of $500 million, the SDF is working to enhance its credit portfolio to $300 million in the next few years by financing a range of projects including renewable sources, transportation, telecom and environment in the SAARC region.
Our strategy is to convert the SDF into a regional bank in the near future. Right now, the focus is to strengthen our credit portfolio.
"Once we have a status of lender then we can raise funds from the capital market through various instruments like bonds," said Motiwal at the SDF Partnership Conclave, which concluded today.
The two-day conference was organised with a view to rope in top institutions like the World Bank, Asian Development Bank and the Asian Infrastructure Investment Bank (AIIB).
Established in 2010 by heads of eight SAARC member states, the Thimpu-based SDF has so far completed financial closure of $73.75 million of which $47 million have already been disbursed.
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Motiwal further said his interactions with senior officials of World Bank, ADB and AIIB have shown that these multilateral institutions are quite keen to take up jointly with SDF projects in south Asia, particularly relating to infrastructure sectors.
According to a World Bank study, the south Asia region needs to invest between $1.7-2.5 trillion to close its infrastructure gaps mainly in energy, power, transportation, telecom and environment.
"We are in touch with 40 local banks from the member states. Some of them like SIDBI have formalised MoUs with SDF," he said when asked how the SDF intends to achieve financial connectivity among SAARC members.
SDF serves as the umbrella financial institution for SAARC projects and programmes.
SAARC comprises Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka.