IIFCL examining overseas bond issuance to fund govt’s big infra plans
In an evident gearing-up attempt to fund the massive infrastructure plans of the new government, India Infrastructure Finance Company (IIFCL) is assessing the option of overseas bond issuance.
According to the information shared by IIFCL Chairman and Managing Director SB Nayar, the IIFCL has a credit line of $5 billion from the Reserve Bank of India (RBI); and is examining a proposal for dollar borrowing.
With the IIFCL’s UK-based subsidiary – which was set up in 2008 – already lending dollars to Indian firms to help fund their capital goods imports, Nayar said that the move will be mulled only after the exhaustion of the RBI window.
Asserting that IIFCL is presently looking only at overseas dollar borrowing, Nayar said that the company has – as of now at least – ruled out a rupee bond on the lines of International Finance Corporation.
Against the backdrop of government estimates which show that infrastructure development in India will necessitate $1 trillion investment in the 12th Five-year Plan, Nayar said that IIFCL is “talking to a number of agencies” for long-term funds for on-lending in the country. He also added that a preliminary study is being carried out by the Asian Development Bank to explore the viability of launching a credit guarantee fund for the infrastructure sector.
Source- The Economic Times
$1 trillion investment in the 12th Five-year Plan, India Infrastructure Finance Company, India Infrastructure Finance Company (IIFCL), Reserve Bank of India
