Leading Japanese bank, Sumitomo Mitsui Banking Corporation (SMBC), has shown interest in financing the Iran-India gas pipeline. Highly placed government sources said that the corporation has written a letter to the Government, indicating its readiness to finance the $4 billion transnational project.In its letter, the bank has said it ‘‘will finance the project, provided the promoters, contractors and the engineering company are ready to share the risk involved in the project equally’’. The corporation has also offered to finance the India-Bangladesh pipeline project.According to an official, the informal trade between India and Pakistan is estimated around $2.5 billion, as against the existing $50 million, with economic activity gaining momentum en route the pipeline.‘‘Iran has gas reserves in the southern region that can be piped better to South Asia and meet the increasing demand of Indian power and fertiliser sectors,’’ said the director general of The Energy and Resources Institute (TERI) R.K. Pachauri, who conceptualised the plan in 1989.He added that the the demand for gas in Amercia could soon pick up substantially, leading to price volatility in the international market. A permanent solution is a capital-intensive pipeline, Pachauri said.On security concerns, Pachauri said: ‘‘With multilateral and international agencies participating in the process, the risk can be hedged considerably’’. He added that the Japanese engineering company Mitsui has also written to the Indian Government about its willingnes to participate in the project.The 2,775 km pipeline will start from Assaluyah in Iran, enter Pakistan and tap into the mid-section of the Hazira-Bijaipur-Jagdishpur (HBJ) section, or feed Delhi directly. The pipeline will have a capacity of three billion cubic feet per day.Energy resources and management firm BHP Billiton estimates that gas can be delivered to the Indian border within 36 months, after financial closure.
