Prelims Level
Mains Level
  • GS 3: Indian Economy | Planning, mobilization of resources, growth, development and employment
  • Why in News?

    • The Asian Development Bank (ADB) and the Government of India signed here in national capital a $300 million Loan Agreement to support lending by India Infrastructure Finance Company Limited (IIFCL).

    Significance:

    • 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.

    Key Highlights:

    • 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 is a wholly-owned Government of India company set up in 2006.
    • It has been registered as a NBFC-ND-IFC with RBI since September 2013.
    • It provides long term finance to viable infrastructure projects – Both Greenfield and Brownfield projects.
    • It provides refinance to banks and other eligible financial institutions for their loans to infrastructure projects.
    • The sectors eligible for financial assistance from IIFCL are as per the harmonized list of Infrastructure Sub-Sectors as approved by the Government and RBI.
    • It broadly includes transportation, energy, water, sanitation,communication, social and commercial infrastructure.
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