ADB signs $ 250 mn loan agreement with India for Infra projects

Asian Development Bank (ADB) continued support for infrastructure development in India. “The Government of India, ADB and the India Infrastructure Finance Company Ltd. (IIFCL) signed a $250 million loan agreement for tranche two of the ongoing Second India Infrastructure Project Financing Facility which aims to stimulate infrastructure development through public-private-partnership investments,” a statement from the Finance Ministry said.
 
The US$ 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 US$ 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. 
 
Venu Rajmony, Joint Secretary, Ministry of Finance said that the IIFCL is expected to achieve cumulative disbursement of $4.4 billion by 31 March 2011, and ADB support has been critical in this regard. 

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