The Centre, Asian Development Bank (ADB) and the India Infrastructure Finance Company Ltd (IIFCL) on Thursday signed a $250-million loan agreement for Tranche 2 of the ongoing Second India Infrastructure Project Financing Facility.
Mr Venu Rajamony, Joint Secretary (multilateral institutions), Department of Economic Affairs, Ministry of Finance, signed the loan agreement on behalf of Central Government.
Mr Hun Kim, ADB Country Director for India, signed the loan agreement on behalf of ADB. Mr Sanjeev Ghai, Chief General Manager, signed the project agreement on behalf of IIFCL.
The $700-million multi-tranche financing facility was approved in 2009 to help IIFCL provide long-term funding for infrastructure development, with public-private-partnership (PPP) projects getting priority. The first tranche of $210 million was earmarked to finance three sub-projects for improving roads and highways in Madhya Pradesh, Punjab, Haryana, Himachal Pradesh, and in the National Capital Region of Delhi, and to partially fund a power project in Kutch District in Gujarat.
The signing of the second tranche will enable ADB to fulfill its commitment to fund 8-10 sub-projects to expand the road network in Gujarat, Maharashtra and Rajasthan by a further 906 km, and to provide additional funding for the Gujarat power project.
Mr Kim said that it is estimated that ADB support is enabling the IIFCL to leverage around 5-7 times its own resources by increasing the confidence of other lenders and attracting private sector participation in public-private-partnership (PPP) projects.
ADB previously provided a $500-million loan to IIFCL for the First Infrastructure Project Financing Facility in 2007, with about $381 million disbursed for 27 road subprojects and $89 million for two international airport sub-projects in Delhi and Mumbai.