NDB Project Finance - a Catalyst for Infrastructure Development in the Country
Project Financing has been NDB’S unique offering since its inception. NDB is equipped with a comprehensive array of project financing skills and expertise developed over three decades through continuous training and development locally as well as overseas. These expertise have been further enhanced through the close working relationships and capacity developments NDB has had with many of the leading multilateral funding agencies such as IFC, ADB, JICA/ JBIC, FMO, KFW and DEG.
Russell de Mel, Chief Executive Officer at NDB says “NDB since 1979 has played a pivotal role in the Sri Lankan economy by contributing to the economic development through financing of small, medium and long term projects in line with national plans and priorities. Over the years, NDB has been able to enlarge its basket of products and services covering almost the entire spectrum of sectors including manufacturing, infrastructure, agriculture and services.
We are committed to promoting key sectors of the economy that are considered of strategic importance to the overall socio-economic development objectives of the country.” Total Project Finance Solutions Under One Roof
Today NDB continues to provide project financing as an integral part of the development banking role covering almost all the sectors of the economy despite its conversion into a commercial banking model. In addition, for the convenience of the clients, project financing is further facilitated and strengthened by making it a package with an array of commercial banking products designed to suit the specific needs of cash flow requirements. Accordingly, NDB is now in a position to leverage the strong corporate relationship built over the years by offering customized and comprehensive financial solutions in both development banking and commercial banking for all corporate needs. NDB’S involvement in a Development Era
The economic revival of the nation following the end of 30 year civil war created new opportunities for the Bank to play an active role in this development era. NDB partnered with prospective project promoters during the recent past in some of their new projects. Key projects with economic significance among many of the projects funded by NDB during last couple of years are as follows. Power and Energy Sector
Reliable and uninterrupted power supply is a prerequisite for the development drive and rapid economic growth. Renewable sources play an important role in energy generation in the backdrop of escalating fossil fuel prices used in thermal power generation. NDB as a development financier has so far funded 24 hydro power projects with a total capacity of 73 MW by providing financial assistance to the value of over Rs 2.5 bn.
Further, NDB takes pride in being a key player in financing landmark initiatives in the wind power sector in Sri Lanka and was a party to the consortium of banks who funded the first ever wind power project in the country. The division has approved facilities to a value of Rs 1.5 bn to the wind power sector which is considered as up-coming renewable energy source within the past few years. The Division played a lead role in arranging finance for a 9.8 MW wind power plant in Kalpitiya along with two other banks. NDB’S total commitment in this project by way of term loans and investment in equity through its group companies is significant.
In addition to the hydro power and wind power sources presently available, NDB also initiated discussions during the last year for financing of other forms of renewable energy projects such as bio-mass energy, waste to energy and solar energy, which are new to the country.
In keeping with its strategy to fund the projects in the region, NDB also approved a facility of USD 10 mn to take part in a syndicated debt facility arranged by the investment banking arm (NDBIB) for a power project in Bangladesh. This has created an opportunity for the Bank to partner with its long standing clients to expand their business to the South Asian region as well. Leisure Sector
The economic revival of the North and the East following the cessation of hostilities has created unprecedented opportunities for project financing. NDB has already funded two hotel projects in Passekudah in the East. The 3 star hotel is with 26 rooms, a diving school and a 8 lane swimming pool with international standards. The 5 star hotel consists of 50 luxury rooms with all amenities overlooking the Passekudah lagoon. In addition, NDB has also funded a 18 roomed luxury boutique hotel with in-house tennis playing facilities in Hikkaduwa through its term loan facilities. NDB is proud to take part in the economic revival of north and east as well as the reawakening of the tourism industry after long years of lull performance. NDB is also planning to finance three more hotel projects in Kalutara, Chilaw and Jaffna. During the year 2011, NDB has approved term loan facilities to the value of Rs 460 mn to the leisure sector. Manufacturing Sector
With the North and East being reawakened the spill over effects on the entire economy resulted in other types of manufacturing facilities also attracting investments. Interestingly very unique projects with novel business ideas were seen being developed and NDB its experience in the development banking over 30 years took initiative in assisting these business ideas with long term financial assistance. One such project NDB was involved in is the first ever Bamboo flooring manufacturing project for the export market. A term loan has been approved to meet the capital expenditure including plant and machinery for the manufacturing plant. A similar novel project that NDB is proud to be a financial services partner is a bicycle assembling plant which is 100% export oriented for the European market. In addition NDB also diversified into rubber and rubber products sector for which foreign currency loans were granted for the expansion of two glove manufacturing projects in Avissawella and Biyagama which is again an export oriented operation. Food and Beverages Sector
Virgin Coconut oil is totally free of additives and chemicals and is a revolutionary product that has captured attention of food, cosmetic and pharmaceutical companies all over the world as an input. With the demand surging ahead, the Sri Lakan entrepreneurs have successfully capitalized this prospect and this provided NDB with great opportunity for contributing to the agriculture related food and beverages industry. NDB offered financial assistance to purchase machinery required for this project which is entirely export oriented.
NDB is now in a position to offer needs of financial services such as insurance facilities for pre and post implementation periods through its group company AVIVA NDB Insurance , investments opportunities through the NDBAVIVA Wealth Management , financial structuring through NDB Investment Bank and stock market related activities through NDB Stockbrokers.
With 58 projects approved to the value of 13 billion in 2011, NDB intends continuing its active involvement in the economically significant and commercially viable projects in Sri Lanka, contributing towards the economic development of the nation.