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The Central Government, Asian Development Bank (ADB) and India Infrastructure Finance Company Ltd (IIFCL) on Wednesday signed a $240-million loan agreement. This is the third and final tranche of the second India Infrastructure Project Financing Facility (IIPF).
In 2009, a $700-million multi-tranche financing facility was approved to finance sub-projects under IIFCL's investment programme for financing viable infrastructure projects in transport, urban and power projects.
The tranche-III is expected to support the Government's infrastructure agenda by enabling IIFCL to catalyse over 10 times its own resources from the private sector.
The loan has a 25-year term with a gross period of five years and interest would be determined in accordance with ADB's LIBOR-based lending facility.
The first and the second tranches of $460 million were earmarked to finance sub-projects for improving roads and highways in several States and to partially fund a power project in Kutch district in Gujarat.
This loan will flow to IIFCL on back-to-back basis with sovereign guarantee by the Centre. The signatories to the tripartite agreement were Mr Venu Rajamony, Joint Secretary, Department of Economic Affairs in the Finance Ministry, Mr Hun Kim, ADB Country Director for India on behalf of ADB, and Mr Sanjeev Ghai, Chief General Manager on behalf of IIFCL.
Mr Kim said majority of sub-projects in this phase involve roads and energy which should improve the economic well being of even the most vulnerable groups.
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