NDB project finance identifies sectors essential for growth

The Chief Executive Officer of NDB, Russell de Mel said, "Since 1979 the NDB has contributed to the economic development of the country through financing small, medium and long term projects. We are committed to promoting key sectors of the economy that are of strategic importance to the overall socio-economic development objectives of the country."

"The NDB has over the years funded projects in sectors such as energy, plantation, telecommunication, tourism, chemicals and plastics and rubber-based industries"' he said.

The 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 b.

It has approved facilities amounting to Rs 1.5 b to the wind power sector. It has 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.

The NDB also initiated discussions during the last year to finance 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 $ 10 m 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 has created unprecedented opportunities for project financing.

The NDB has already funded two hotel projects in Pasikudah in the East. The 3 star hotel is with 26 rooms, a diving school and an eight lane swimming pool made to international standards.

The 5 star hotel consists of 50 luxury rooms with all amenities overlooking Pasikudah lagoon.

The NDB has also funded an 18- roomed luxury boutique hotel with in-house tennis playing facilities in Hikkaduwa through its term loan facilities. The NDB will finance three more hotel projects in Kalutara, Chilaw and Jaffna. In 2011, the NDB approved term-loan facilities to the value of Rs 460 m to the leisure sector.

Manufacturing sector

The NDB was involved in the Bamboo flooring manufacturing project for the export market. A term loan has been approved to meet 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 percent export-oriented for the European market. 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 beverage sector

With the demand surging for virgin coconut oil, entrepreneurs have successfully capitalised this prospect and the NDB has contributed to the agriculture-related food and beverages industry. NDB offered financial assistance to purchase machinery for the project which is export oriented.

With 58 projects approved to the value of Rs 13 b in 2011, the NDB intends continuing its active involvement in the economically significant and commercially viable projects in Sri Lanka.