Richard Simpson, senior investment officer of ADB India resident mission, told reporters here on Thursday that the bank has held discussions with finance ministry and Insurance Regulatory Authority over the last few days and has been assured that investment by multilateral agencies in insurance sector would not be part of the proposed cap." He was speaking on the sidelines of a seminar on infrastructure financing held in New Delhi. However, he added, that the Centre has not yet finalised its decision.

"We believe that investment by agencies like ADB, International Finance Corporation and Commonwealth Development Corporation should not be considered as foreign investment," he said.

Simpson said ADB was keen to pick up equity in at least two general insurance companies and two lifeinsurance companies once the sector was opened up for private sector. "Almost every joint-venture insurance company in the country has talked to us on picking up equity," he said.

Meanwhile, Frank J Polman, resident representative of ADB said that the bank would accelerate direct financing to private-sector companies involved in infrastructure development in the country. Polman said that the bank's record of implementing projects in the country is good and in the next three years it would venture into the new areas in infrastructure financing.

Polman said that ADB is concentrating on pilot projects in the country. "There is need to combine public-sector infrastructure initiatives with private-sector initiatives," he said.

He pointed out at the urgency of participation in supporting the Government's privatisation initiatives and use of new financial techniques for achieving the goals in private-sector financing.

Richard Simpson, an official from the private sector group of the bank, said that ADB 'sapproved investments in the current portfolio stood at $248 million. Simpson said that among its recent initiatives, the bank undertook investment in LNG sector and had financed a gas master-plan study and assisted original structuring of Petronet LNG and bidding out of gas-supply contracts.

Simpson said that ADB could easily finance larger projects as it is associated with family of fundings such as AIG equity fund, IVCL/SARA Fund and Asian Mezzanim Fund. "The bank can refer larger projects to these funds," he said.

Outlining the thrust areas of the bank for financing, Simpson said that power, roads, ports, water supply and water disposal, environment, telecommunication and urban infrastructure are the key areas for private-sector investment. "The bank was considering a number of fund investments such as power investment fund, industrial equity fund and recovery opportunities," he said.

Talking about ADB's overall private sector strategy and operations, Paolo Lombardo, another official from the bankoutlined the bank's priorities such as infrastructure, comprising public/private partnership, private initiatives, capital markets comprising investment funds, direct investment in financial sectors and selected industrial projects.