India Infrastructure Finance Company Limited (IIFCL)
India Infrastructure Finance Company Limited (IIFCL) was set up in 2006 to provide long term debt for infrastructure projects. Infrastructure projects are typically long gestation projects and require debt of longer maturity. The provision of long term funds from commercial banks is restricted due to their asset-liability mismatch. IIFCL tries to address the above constraints in long term debt financing of infrastructure.
IIFCL provides financial assistance to commercially viable projects, which includes projects implemented by a public sector company; a private sector company; or a private sector company selected under a Public Private Partnership (PPP) initiative. Priority is given to those PPP projects awarded to private companies, which are selected through competitive bidding process.
Only projects pertaining to following sectors are eligible for financing from IIFCL:
- Road and bridges, railways, seaports, airports, inland waterways and other transportation projects;
- Urban transport, water supply, sewage, solid waste management and other physical infrastructure in urban areas;
- Gas pipelines;
- Infrastructure projects in Special Economic Zones;
- International convention centres and other tourism infrastructure projects;
- Cold storage chains;
- Fertilizer Manufacturing Industry
IIFCL raises funds from domestic as well as external markets on the strength of government guarantees. The mode of lending is either long term debt; refinance to banks and financial institutions for loans granted by them to infrastructure companies; take out finance; subordinate debt and any other mode approved by Government from time to time. The total lending by IIFCL is limited to 20% of the Total Project Cost.
In 2008, a wholly owned subsidiary of IIFCL, IIFCL (UK) Ltd, was established in London with the objective of utilising the foreign exchange reserves of RBI to fund off-shore capital expenditure of Indian companies implementing infrastructure projects in India.
As on 31st March 2012, IIFCL has sanctioned loans aggregating Rs 40,373 crore for 229 projects which involve a total project cost of Rs 3,52,069 crore. The total disbursements as of March 31, 2012 are Rs 20,377 crore. The sector wise details regarding sanctions and disbursements can be seen in its Annual Report of Financial Year 2011-2012.