India has sought $2 billion in infrastructure funding from the New Development Bank, the multilateral bank floated by the BRICS grouping.
“We have proposed projects worth about $2 billion for NDB funding, which I hope will be taken up by the board expeditiously,” Jaitley said.
Of some seven initial projects worth $1.51 billion which had been approved for funding by the Shanghai-based bank, one is for road projects in Madhya Pradesh worth $350 million, which was signed earlier this week. The other Indian project which has been firmed up is for solar power worth $250 million.
Jaitley was speaking at the second annual meeting of New Development Bank, headed by India’s K.V. Kamath.
Five nations – Brazil, Russia, India, China, South Africa – make up BRICS .
Officials said the New Development Bank (NDB) also has plans to raise $500 million through rupee-denominated masala bonds later this financial year.
The India issuance would be in rupees but targeting overseas markets.
The RBI rules currently allow rupee-denominated overseas bonds by corporate bodies. This issuance follows a successful renminbi bond issue worth 3 billion renminbi in China earlier this year.
Last year the World Bank issued renminbi and rupee-denominated bonds in the global markets, listing them on the Italian stock market. The five-year rupee bond had a coupon rate of 5.8 per cent.
Jaitley said India has an ambitious investment plan for ramping up infrastructure, which could cost up to $646 billion over the next five years. “Seventy per cent of this will be required in power, roads and urban infrastructure sectors,” he said.
“This offers an enormous opportunity to an institution such as the NDB, whose core mandate is sustainable infrastructure development.”
The finance minister said India will work with the NDB to develop a strong shelf of projects in specific areas such as smart cities, renewable energy, urban transport, including metro railways, clean coal technology, solid waste management and urban water supply.
“The uniqueness of NDB should lie in faster loan appraisal, a lean organisational structure resulting in lower cost of loans, a variety of financing instruments, including local currency financing,” he said.
Chinese finance minister Xiao Jie, who also addressed the gathering, said BRICS nations will have to work towards reforming the global economic system as their voice remains inadequate despite powering per cent of global economic growth.
“We began operations in July 2015 and since then, NDB has come a long way. The focus was to build the foundation of NDB, we focussed on green and environmentally sustainable projects. Seven projects have been done so far which aggregate around $1.5 billion. Six of them are in the renewable energy sector and one in transport financing,” NDB president K.V. Kamath said.
The bank had signed its first loan agreement for a project in China in December last year.
“We are focusing on lending in local currency which will help our member countries. We have signed our second loan in India during this trip,” Kamath added.