WASHINGTON, March 14 (Reuters) - The World Bank plans to issue special bonds to India worth $4.3 billion as a way to increase lending to the country and overcome a technicality on its borrowing limit at the global development institution, the bank said on Wednesday.
India's current exposure limit to the World Bank stands at $17.5 billion. The special bonds will raise that limit by $4.3 billion over the next three years, the World Bank said.
Without the special bond issue, the World Bank would have faced constraints on how much it can lend to India and annual funding would have declined to less than $1 billion from about $4 billion a year.
"Without taking this action, it would have been difficult for the Bank to assist India meaningfully as it tackles the remaining large challenges of lifting some 300 million out of poverty," said Isabel Guerrero, World Bank vice president for South Asia.
Despite enviable economic growth of 8 percent to 9 percent over the last five years, India is still plagued by widespread poverty. The lack of proper infrastructure has become a bottleneck for growth in Asia's third-largest economy.