MISCELLANEOUS – GUIDELINES FOR PRIVATE SECTOR OPERATION ENGAGEMENT BY MULTILATERAL DEVELOPMENT BANKS (MDBs) IN INDIA – MISSION CLEARANCES/NO OBJECTION LETTERS THEREOF
CIRCULAR NO.11/1/2012-ADB.I, DATED 27-6-2016
A circular of even no. dated 28th December. 2015 was issued on the above subject. Now the matter pertaining to Mission Clearance/ No Objection Letters has been reexamined and guidelines, as under would be applicable in the matter.
2. Multilateral Development Banks (MDBs) are mandated to be active project developers in addition to being just project financiers. MDBs are extending assistance for private sector development and operations to strengthen the business environment in the Developing Member Countries and to promote private investments. MDBs are also expected to support innovative financing solutions for projects, particularly for smaller private sector transactions that have significant development impact but involve higher up-front risks and costs. More so, because Member Countries provide tax concessions on MDB’s income from such investments.
3. It is noted that MDBs’ Articles of Agreement provides for undertaking financing to Private Sector in the territory of a Member Country only if the Member does not object to such financing. It is expected that MDB’s Private Sector Operations Department/or designated Private Sector Operations entity (hereinafter referred as “the Agency”) will pursue proposals that are in consonance with the Country Partnership Strategy.
4. The following procedure will be applicable for ‘Mission Clearance’ and ‘No Objection Letter’ for financing proposals received in Department of Economic Affairs (DEA) from the Agency.
I. Procedure for Mission Clearances:
|(i)||Mission meeting with only private sector clients will not require any prior clearance but would need to intimate DEA in advance for the first mission. No further intimation would be necessary for subsequent mission mounted by the Agency for the same project.|
|(ii)||Normally, interaction with the officials of Central, State government or Public Sector is not envisaged for pursuing private sector development and operations, however, in case such interaction is considered necessary, the Agency would intimate DBA.|
II. Procedure for ‘No Objection Letter’ (NOL) for Private Sector Investment/Guarantee proposals:—
|(i)||In the beginning of the financial year, the Agency shall hold consultations with the DEA to finalize their annual business plan with identified or likely projects.|
|(ii)||Subject to clause (iv) below ‘No Objection Letter’ from DEA would be required for all Investment/Guarantee proposals before being taken up for approval by the competent authority of the Agency.|
|(iii)||Request for ‘No Objection Letter’ along with the summary of the proposal would be sent to DEA by the Agency well in advance of their need for its approval in the Board.|
|(iv)||NOL shall be deemed to have been issued, if no decision is conveyed within 14 days of the receipt of such request. Wherever unavoidable, DEA may seek by email additional information; requests for additional information will not lead to extensions of this 14-day period, unless the Agency takes more than 3 days in responding to such requests. If replies to such requests take more than 3 days, the 14-days period will stand extended by the number of days in excess of 3 days which were taken to respond. Responses shall also be received by email.|
5. These guidelines would be applicable with immediate effect and shall supersede other previous communications on the matter issued vide DO No. 11/16/2005-ADB.I, dated 22nd May 2006, Standard Operating Procedures dated 18th October 2012 and Circular No. 11/1/2012-ADB.I, dated 28th December, 2015.
6. These issues with the approval of Secretary, DEA.