IIFCL is all set to start with $1 billion for the pilot project
Ensuring sufficient flow of funds to the infra sector, Infrastructure Finance Company (IIFCL) in a recent move has approached the Asian Development Bank (ADB) seeking $12-billion credit enhancement
facility so as to complete several long-gestation infrastructure projects lying on hold for want of sufficientfunds. In this connection, the Centre has already given an in-principle clearance to the company to start a pilot scheme under which it will provide a partial credit guarantee to infrastructure projects to enhance their bond rating to “AA” and make them eligible for financing from insurers and pension funds. The initiative is not just going to help project developers but also the corporate bond market.
According to official sources, IIFCL is all set to start with $1 billion for the pilot project next month. But the current move is aimed at generating more resources as demand for funds will pick up in the coming years as the country needs close to $1 trillion to ramp up and make up for the infrastructure deficit as the facility will remain available for the next three years. IIFCL was set up as an SPV to facilitate infrastructure funding given the mismatch between the tenure of normal bank loans and the long-gestation infrastructure projects and the player is mandated to mobilize resources from various sources, including ECBs, said Chairman S K Goel adding that time and cost overrun due to delays in environment clearances, difficulties in land acquisition, lack of fuel supply agreements, high-borrowing costs and inadequate long-term funds are making it increasingly difficult to award and complete the infrastructure projects.
Hello, My self Neelmani, A Civil Engineer. Presently I am working with Indian Railway. An Affiliate Member of ASCE “American Society of Civil Engineers”. B.Tech in Civil Engineering from MIT Muzaffarpur and Diploma in Railway from IPWE as well as Civil Engineering from Govt. Polytechnic Muzaffarpur.