IIFCL works on enhancing bonds to finance infra projects in India

Subscribe to our newsletter and get the latest news and business opportunities in your inbox
IIFCL works on enhancing bonds to finance infra projects in India

Local press reported yesterday that V.Venkata Ramana, Director of India Infrastructure Finance Company Limited (IIFCL),  emphasised at an event the need to come out with longer tenure debt options for infrastructure projects ensuring financial viability while also strengthening the bond market in India.

He said that IIFCL can lend for longer tenures, longer than commercial banks and remain as sole lender in case of public private partnership projects under direct lending.

He also said IIFCL in association with the Asian Development Bank is working on credit enhancement scheme on pilot basis for enabling infrastructure projects to tap capital markets.

IIFCL is presently undertaking pilot transactions under its Credit Enhancement initiative. Under this scheme IIFCL provides partial credit guarantee to enhance the ratings of the project bond issue thereby enabling channelization of long term funds from fairly untapped sources such as insurance companies and pension funds etc towards infrastructure sector.

Asian Development Bank (ADB) is participating in this endeavor by committing to support IIFCL by providing backstop guarantee facility up to 50% of IIFCL's underlying risk. Credit enhancement scheme will help the project developers to raise funds at a reasonable rate from the bond market and consequently help in development of corporate bond market in India.

Under this initiative, IIFCL said it has helped financing four projects. The guarantee agreement for those projects has been signed in the first private transaction for bond issue by NHAI. The road projects are promoted by the GMR Group.

V.Venkata Ramana said that they were already associated with some of the metro projects in the country and expects to close some more deals extending finance.

List of country news

Country news

  • July 17, 2014

    Standard Chartered PE to invest in power transmission business

    Sterlite Technologies Limited (Sterlite), a global provider of transmission solutions for the telecom and power industries, announced last week that it has entered into agreements with Standard Chartered Private Equity for an equity investment of 5,000 million rupees (approximately $83.2 million) in Sterlite Power Grid Ventures Ltd (SPGVL). Read more
  • July 18, 2014

    BRICS to create new development bank

    Leaders from the BRICS countries - Brazil, Russia, India, China, and South Africa - formally launched a joint international development bank on Tuesday July 15th during their annual summit, held this year in the Brazilian city of Fortaleza. Read more
  • July 18, 2014

    Two firms bid for Maharashtra road PPP project

    India's Maharashtra State Road Development Corporation (MSRDC) has received two bids for the Versova-Bandra Sea Link (VBSL) project. Read more
  • July 23, 2014

    Bihar state launches RFQ for road PPP project

    The Government of Bihar (India), through Bihar State Road Development Corporation Limited (BSRDCL), Read more
  • July 24, 2014

    Updates on new airport projects in India

    The Indian Minister of State for Civil Aviation, Shri G.M. Siddeshwara informed several days ago that the Government has accorded site clearance for the Greenfield international airport project at Dholera at Ahmedabad in Gujarat, which is being developed by the Gujarat Infrastructure Development Board. Read more

Share this news

Join us

In order to get full access to News section, you must have a full subscription. You can check all the benefits of becoming a member and purchase a subscription on our membership page.