To­wards strate­gic growth in the South Asia re­gion: Q&A with SDF CEO

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SAARC De­vel­op­ment Fund’s Part­ner­ship Con­clave 2018 on “Re­gional In­te­gra­tion through Project Col­lab­o­ra­tion and In­vest­ments” will be held from July 2- 3, 2018 at In­ter­na­tional Cen­tre, New Delhi, In­dia to solicit cross­bor­der project co-fi­nanc­ing un­der the so­cial, eco­nomic & in­fra­struc­ture win­dows of SDF in SAARC mem­ber states and to build part­ner­ships with var­i­ous or­ga­ni­za­tions for fund mo­bi­liza­tion and in­vest­ments in SAARC mem­ber states. Dr. Su­nil Moti­wal, CEO, SDF high­lights the role of SDF in the South Asia re­gion:

Mr. CEO we start this con­ver­sa­tion by ask­ing you to brief us about SAARC De­vel­op­ment Fund and its de­vel­op­men­tal role in the SAARC re­gion?

Thank you for your in­ter­est in SAARC De­vel­op­ment Fund (SDF) – the in­sti­tu­tion was es­tab­lished by the heads of the eight SAARC mem­ber States in April 2010 and is gov­erned by the gov­ern­ing coun­cil that com­prises of fi­nance Min­is­ters of SAARC mem­ber states. The aim of SDF is to: (i) pro­mote the wel­fare of the peo­ple of SAARC re­gion, (ii) im­prove their qual­ity of life, and (iii) ac­cel­er­ate eco­nomic growth, so­cial progress and poverty alle­vi­a­tion in the re­gion. SDF serves as the um­brella fi­nan­cial in­sti­tu­tion for SAARC projects and pro­grams which are in ful­fill­ment of the ob­jec­tives of the SAARC Char­ter. SDF pro­motes re­gional in­te­gra­tion and eco­nomic co­op­er­a­tion in the re­gion and has three fund­ing win­dows viz. so­cial, eco­nomic and in­fra­struc­ture. SDF is cur­rently im­ple­ment­ing twelve re­gional projects with more than 70 im­ple­ment­ing and lead im­ple­ment­ing agen­cies cov­er­ing all the eight mem­ber states un­der the so­cial win­dow fund­ing. We have al­ready com­mit­ted USD 73.74 mil­lion for so­cial win­dow projects as of date out of which it has dis­bursed USD 47 mil­lion to the mem­ber states for so­cial win­dow projects. Re­cently we have in-prin­ci­ple ap­proved two en­ergy in­fra­struc­ture projects in the re­gion with a loan com­mit­ment of USD 30 mil­lion un­der our in­fra­struc­ture win­dow. Other po­ten­tial re­gional con­nec­tiv­ity projects are un­der our ac­tive con­sid­er­a­tion to co-fi­nance in SAARC Mem­ber states. SDF is in the process of launch­ing the So­cial En­ter­prise De­vel­op­ment Pro­gram (SEDP) as part of its so­cial win­dow. The pro­gram will be im­ple­mented in all the SAARC Mem­ber States with the ob­jec­tive of iden­ti­fy­ing and build­ing so­cial en­ter­prises by us­ing a mix of grants and con­ces­sional re­turn­able cap­i­tal. The pro­gram in­tends to fund around 80 en­ter­prises across the 8 SAARC Mem­ber States an­nu­ally. SDF also pro­poses to launch its MSME pro­gram in or­der to up­grade Mi­cro Small and Medium En­ter­prises in the SAARC re­gion by pro­vid­ing line of credit. SDF would cre­ate ac­cess to fi­nan­cial ser­vices which can in-turn boost job cre­ation, raise in­come, re­duce vul­ner­a­bil­ity and in­crease in­vest­ments in hu­man cap­i­tal in SAARC mem­ber states There­fore SDF is well poised to con­trib­ute sig­nif­i­cantly in achiev­ing its de­vel­op­men­tal role in the SAARC re­gion.

Please ex­plain us how SDF can play an im­por­tant role in Re­gional Co­op­er­a­tion and In­te­gra­tion in the SAARC re­gion?

Our vi­sion is to cre­ate an in­te­grated, poverty-free, and pros­per­ous South Asia re­gion through project fund­ing and col­lab­o­ra­tion. As such we are com­mit­ted to sup­port re­gional co­op­er­a­tion and in­te­gra­tion (RCI) ini­tia­tives in the re­gion. All the projects and pro­grams we fi­nance; have re­gional in­te­gra­tion and con­nec­tiv­ity com­po­nent as in­te­gral parts of the project de­sign and de­vel­op­ment. Look for ex­am­ple, our so­cial win­dow projects are im­ple­mented and repli­cated in var­i­ous SAARC mem­ber states. Sim­i­larly for projects un­der our eco­nomic and in­fra­struc­ture win­dows, we are fo­cus­ing to co-fi­nance cross bor­der re­gional con­nec­tiv­ity projects in en­ergy, power, trans­porta­tion, Tele com­mu­ni­ca­tion, en­vi­ron­ment, agri­cul­ture, science and tech­nol­ogy and trade & in­dus­trial de­vel­op­ment in the South Asia re­gion.

You spoke about co-fi­nanc­ing cross bor­der projects in SAARC Mem­ber States. Tell us about the sec­tors you are fo­cus­ing to co-fi­nance?

Our fo­cus ar­eas of fund­ing un­der the eco­nomic win­dow are projects re­lated to trade and in­dus­trial de­vel­op­ment, agri­cul­ture and al­lied sec­tors, ser­vices sec­tor, science and tech­nol­ogy, and other non-in­fra­struc­ture ar­eas. Sim­i­larly our fo­cus ar­eas of fund­ing the in­fra­struc­ture win­dow are projects re­lated to en­ergy, power, trans­porta­tion, Tele Com­mu­ni­ca­tions, en­vi­ron­ment, tourism, and other in­fra­struc­ture ar­eas. In so­cial win­dow, we fo­cus to fi­nance projects on poverty alle­vi­a­tion, so­cial de­vel­op­ment fo­cus­ing on ed­u­ca­tion, health, hu­man re­source de­vel­op­ment, sup­port to vul­ner­a­ble/ dis­ad­van­taged seg­ments of the so­ci­ety, fund­ing needs of com­mu­ni­ties, mi­cro en­ter­prises, ru­ral in­fra­struc­ture de­vel­op­ment. For our projects un­der eco­nomic and in­fra­struc­ture win­dows, the project has to pro­vide di­rect ben­e­fit to more than on SAARC mem­ber states.

What is the in­ter­pre­ta­tion of the term Di­rect Ben­e­fit to more than one SAARC Mem­ber States?

Di­rect ben­e­fit go­ing to more than one mem­ber state may be de­fined to in­clude cross bor­der trade & com­merce, in­fra­struc­ture, projects re­sult­ing in sig­nif­i­cant value of ex­ports on con­tin­u­ous ba­sis be­tween more than one mem­ber state like in the case of man­u­fac­ture and sup­ply of in­ter­me­di­ary prod­ucts to other mem­ber state, eq­uity in­vest­ment from one mem­ber state into an­other by pub­lic or pri­vate sec­tor com­pa­nies (FDI) or any other cri­te­ria as de­cided by the board, con­sid­er­ing the unique needs of any project/s.

What is the sta­tus of in­fra­struc­ture projects funded by the SDF?

We have re­cently ac­corded in-prin­ci­ple ap­proval of two im­por­tant in­fra­struc­ture projects in en­ergy sec­tor in the SAARC re­gion. These in­clude waste to en­ergy project in Sri Lanka with par­tic­i­pa­tion of In­dia and hy­dropower project in Nepal with par­tic­i­pa­tion of Bangladesh and In­dia. The to­tal loan com­mit­ment would be USD 30 mil­lion. We are con­fi­dent that the projects would help SDF to achieve its de­vel­op­ment goals in the re­gion and pro­mote wel­fare and pros­per­ity of the peo­ple in the SAARC re­gion. Other po­ten­tial bank­able in­fra­struc­ture projects with re­gional con­nec­tiv­ity are un­der our ac­tive con­sid­er­a­tion to co-fi­nance.

Are there any plans to raise funds in the cur­rent year or there­after?

Con­sid­er­ing huge the fund­ing re­quire­ment of the re­gion; it is im­por­tant for us to raise funds from var­i­ous mech­a­nisms for lend­ing to projects and pro­grams in the SAARC re­gion. There­fore we def­i­nitely look for­ward to raise funds in the near fu­ture.

Ex­plain us about the var­i­ous MOUs signed by the SDF with dif­fer­ent mul­ti­lat­eral agen­cies and other in­sti­tu­tions. How has these part­ner­ships helped SDF?

SDF has signed MoUs with Asian De­vel­op­ment Bank, The World Bank, UNICEF, UNDP, SAARC Ar­bi­tra­tion Coun­cil, Small In­dus­tries De­vel­op­ment Bank of In­dia (SIDBI), South Asian Uni­ver­sity, and SAARC Cham­ber of Com­merce & In­dus­try. All these MoU cap­ture the broad frame­work of col­lab­o­ra­tion and part­ner­ship and aim for joint co­op­er­a­tion with these or­ga­ni­za­tions in achiev­ing the de­vel­op­men­tal goals of the SAARC re­gion. We work closely with most of the mul­ti­lat­eral de­vel­op­ment banks within and out­side the re­gion. We are also in the process of sign­ing few more MoUs with other de­vel­op­ment part­ners in the re­gion.

You are here at New Delhi for the SDF Part­ner­ship Con­clave. Let us know the ob­jec­tives of this con­clave.

SDF is or­ga­niz­ing the SDF Part­ner­ship Con­clave with the aim to­wards strate­gic growth in the South Asia re­gion through Project Col­lab­o­ra­tion and Re­gional In­te­gra­tion and pro­poses to (i) solicit cross-bor­der project co-fi­nanc­ing un­der the so­cial, eo­nomic & in­fra­struc­ture win­dows of SDF in SAARC Mem­ber States, and (ii) Build part­ner­ships with var­i­ous or­ga­ni­za­tions for fund mo­bi­liza­tion andiIn­vest­ment in SAARC Mem­ber States. The ul­ti­mate ob­jec­tive is to sup­port re­gional co­op­er­a­tion and in­te­gra­tion (RCI) ini­tia­tives in the re­gion.

Do you think that these types of ini­tia­tives such as host­ing of SDF Part­ner­ship Con­clave are in­stru­men­tal in bridg­ing the trade and in­vest­ment gaps in the SAARC re­gion?

In­deed! The larger man­date of such an event is to pro­mote re­gional co­op­er­a­tion and in­te­gra­tion among var­i­ous stake­hold­ers and bridge the gap in trade and in­vest­ment in the re­gion. For us the en­tire re­gion of South Asia is im­por­tant and we aim to­wards in­clu­sive growth of the en­tire re­gion. You see, we have par­tic­i­pa­tion from var­i­ous mul­ti­lat­eral de­vel­op­ment banks (ADB, AFD, AIIB, NDB, and The World Bank), UN Bod­ies (UNEP, UNIDO, UNCDF, UN Women, UN WFP, ILO, IOM), Re­gional Fi­nan­cial In­sti­tu­tions, Cham­bers of Com­merce & Ex­port Pro­mo­tion Coun­cils (FICCI, CII, ASSOCHAM, PHD, EEPC, FIEO, Asia Foun­da­tion), Sched­uled Com­mer­cial Banks (DFCC Sri Lanka, Ceylon Bank Sri Lanka, BRAC Bank Bangladesh and City Bank Bangladesh, SBI CAPS In­dia, SREI In­dia), Pub­lic Sec­tor, In­fra­struc­ture De­vel­op­ment Agen­cies (BIFFL Bangladesh, HDFC Mal­dives, NIB Nepal), Tech­nol­ogy De­vel­op­ment Board, Depart­ment of Science and Tech­nol­ogy In­dia, donor agen­cies, civil so­ci­ety or­ga­ni­za­tion and se­nior of­fi­cials from Min­istry of Fi­nance of SAARC mem­ber states. This is such an im­por­tant event for joint co­op­er­a­tion and part­ner­ship in the re­gion.

How do you see the re­gion go­ing ahead from here?

The re­gion, with large geo­graph­i­cal di­ver­sity, from the high moun­tains to coastal re­gions, has its peo­ple as the big­gest as­set, with a large con­cen­tra­tion be­tween the age group of 15-24 years. It has huge pool of skilled man­power and low cost work­force with large pool of ed­u­cated pro­fes­sion­als and abun­dance of nat­u­ral re­sources and is one of the fastest grow­ing re­gions in the world. With en­hanced co­op­er­a­tion and in­te­gra­tion in the re­gion, we can ex­pect great re­sult. We would ex­tend our tire­less ef­forts to achieve our man­date of pro­mot­ing the wel­fare of the peo­ple, im­prov­ing their qual­ity of life and ac­cel­er­ate eco­nomic growth, so­cial progress and poverty alle­vi­a­tion in the SAARC re­gion.

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