Government inks $300 million loan agreement with ADB to support IIFCL
Union Government has inked $300 million Loan Agreement with Asian Development Bank (ADB) to support lending by India Infrastructure Finance Company Limited (IIFCL). The loan will enhance availability of long-term finance for PPP projects, improve operational capacity of IIFCL. It will expand portfolio of infrastructure financing instruments available to IIFCL. It is expected to compliment Government’s infrastructure building efforts.
ADB funding is expected to fund at least 13 sub-projects through IIFCL, involving roads and renewable power generation, under the last tranche. It expected to help catalyze the financial closing of $2.4 billion in investments. In addition, attached technical assistance will support IIFCL capacity development and will focus on IIFCL’s financial management and social and environmental safeguards. It will support renewed effort of Central Government in accelerating infrastructure growth through increased Private Sector investment. The Project undertaken it will be relevant and responsive to constraints to bank based infrastructure financing, fiscal space creation, and repercussions on GDP growth.
India Infrastructure Finance Company Limited (IIFCL)
It was set up in 2006 to provide long term debt for infrastructure projects. It provides financial assistance to commercially viable projects, which includes projects implemented by public sector company, private sector company; or private sector company selected under Public Private Partnership (PPP) initiative. IIFCL raises funds from domestic as well as external markets on strength of government guarantees.
Following sectors projects are eligible for financing from IIFCL:
- Gas pipelines;
- Cold storage chains;
- Fertilizer Manufacturing Industry
- Infrastructure projects in Special Economic Zones;
- International convention centres and other tourism infrastructure projects;
- Road and bridges, seaports, railways, airports, inland waterways and other transportation projects.
- Urban transport, water supply, sewage, solid waste management and other physical infrastructure in urban areas.