Continued Support for Infrastructure Development in India from ADB US$ 250 Million Loan Agreement Signed for Second India Infrastructure Project Financing Facility, Tranche-II

Press Information Bureau

Government of India

Ministry of Finance

17-March-2011 16:38 IST

Continued Support for Infrastructure Development in India from ADB US$ 250 Million Loan Agreement Signed for Second India Infrastructure Project Financing Facility, Tranche-II

The Government of India, Asian Development Bank (ADB) and the India Infrastructure Finance Company Ltd. (IIFCL) today signed a $250 million loan agreement for Tranche 2 of the ongoing Second India Infrastructure Project Financing Facility which aims to stimulate infrastructure development through public-private-partnership investments.

The signatories were Shri Venu Rajamony, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India, and Mr. Hun Kim, ADB Country Director for India. Shri. Sanjeev Ghai, Chief General Manager, signed the project agreement on behalf of the (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 subprojects 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 to 10 subprojects 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.

ADB Country Director Mr. Kim said that it is estimated that ADB support is enabling the IIFCL to leverage around 5 to 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 subprojects in Delhi and Mumbai.

Shri Venu Rajmony, Joint Secretary, Ministry of Finance said that the India Infrastructure Finance Company Ltd. (IIFCL) is expected to achieve cumulative disbursement of $4.4 billion by 31 March 2011, and ADB support has been critical in this regard.

 DSM /BY/GN