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ADB closes sectoral loan package

C. Gouridasan Nair

Official says it is not the practice of ADB to impose conditions for loans

THIRUVANANTHAPURAM: The Asian Development Bank (ADB) has closed the sectoral development programme loan package that it had extended to Kerala, and senior officials of the Bank say that they are wiser for the experience. The ADB had released 200 million U.S. dollars in two tranche, but the loan and measures taken by the Government had touched off a major controversy in Kerala.

The ADB had extended a loan assistance of $200 million under three heads - modernisation of Government, power sector reforms and improvement of road infrastructure.

The ADB released the final tranche of the loan assistance in May 2005 and officially closed the loan programme in December, Kunio Senga, Director-General (South Asia) of the Asian Development Bank, told The Hindu here on Tuesday.

He said the money disbursed under the sector development programme loan scheme had been utilised well and the impact of the loan programme was quite evident. The evaluation reports would be ready by January, he added.

Mr. Senga, who was here for two days for the Third Tripartite Portfolio Review Meeting involving senior ADB officials and representatives of the executing agencies and the Government of India, said the ADB had learned some very important lessons from the way it went about implementing the loan assistance programme for Kerala.

"We have learnt that full disclosure, ownership, stakeholder consultation and sustainability are key components when it comes to dealing with States such as Kerala. We should have been more open in information dissemination and ensuring that there was wider consultation with the stakeholders," Mr. Senga said.

When pointed out that the resistance to the loan programme came on account of the feeling that the ADB was imposing conditions on the Government of Kerala, Mr. Senga said it was not the practice of the ADB to impose conditions on any Government.

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