ADB loans US$700 million to IIFCL

Will accelerate investment in Indian infrastructure.

The Asian Development Bank’s loan to the India Infrastructure Finance Company (IIFCL) supports the Indian government’s efforts to accelerate investment in the infrastructure sectors such as highways, urban infrastructure and renewable energy projects.

ADB said Indian banks that are the key source of infrastructure finance are increasingly unable to provide funds since they are fast approaching exposure limits to key infrastructure companies.

ADB noted that poor infrastructure is one of the biggest drags on growth and development in India and there is a large investment funding gap of about US$113 billion during the 12th Five-Year Plan for 2012-2017.

It said the assistance to IIFCL will spur greater involvement from the private sector. This new loan comes after a US$500 million loan approved in 2007. This helped fund 30 PPP projects, including the Delhi and Mumbai international airports.

There is a further US$700 million approved in 2009 that is still being disbursed, ADB said.