$240-m ADB loan to boost infra financing

New Delhi: The Central Government, Asian Development Bank (ADB) and India Infrastructure Finance Company Ltd (IIFCL) on Wednesday signed a $240-million loan agreement. This is the third and final tranche of the second India Infrastructure Project Financing Facility (IIPF).

In 2009, a $700-million multi-tranche financing facility was approved to finance sub-projects under IIFCL's investment programme for financing viable infrastructure projects in transport, urban and power projects.

The tranche-III is expected to support the Government's infrastructure agenda by enabling IIFCL to catalyse over 10 times its own resources from the private sector.

The loan has a 25-year term with a gross period of five years and interest would be determined in accordance with ADB's LIBOR-based lending facility.

The first and the second tranches of $460 million were earmarked to finance sub-projects for improving roads and highways in several States and to partially fund a power project in Kutch district in Gujarat.

This loan will flow to IIFCL on back-to-back basis with sovereign guarantee by the Centre.