India: MFF - Second India Infrastructure Project Financing Facility (IIPFF II) - PFR3

Sovereign Project | 41036-043

Summary

The executing agency for the Second India Infrastructure Project Financing Facility (IIPFF II), the India Infrastructure Finance Company Limited (IIFCL), requested ADB to approve the Tranche III (Periodic Financing Request [PFR]3) of IIPFF II for $240 million to finance 7 indicative new subprojects in addition to the disbursement balance left for 5 existing subprojects approved under Tranches I and II. The total cost of the 7 subprojects is estimated at Rs140.18 billion (or $2.92 billion), inclusive of taxes, duties, and interest and other charges on the loan during construction, against which IIFCL sanctioned Rs15.2 billion (or $316.27 million). The PFR3 is expected to catalyze 12 times of funding resources from the market.

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Project Name MFF - Second India Infrastructure Project Financing Facility (IIPFF II) - PFR3
Project Number 41036-043
Country India
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2822-IND: MFF - Second India Infrastructure Project Financing Facility (IIPFF II)(Subproject 3)
Ordinary capital resources US$ 240.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Finance - Infrastructure finance and investment funds
Gender Equity and Mainstreaming No gender elements
Description

The executing agency for the Second India Infrastructure Project Financing Facility (IIPFF II), the India Infrastructure Finance Company Limited (IIFCL), requested ADB to approve the Tranche III (Periodic Financing Request [PFR]3) of IIPFF II for $240 million to finance 7 indicative new subprojects in addition to the disbursement balance left for 5 existing subprojects approved under Tranches I and II. The total cost of the 7 subprojects is estimated at Rs140.18 billion (or $2.92 billion), inclusive of taxes, duties, and interest and other charges on the loan during construction, against which IIFCL sanctioned Rs15.2 billion (or $316.27 million). The PFR3 is expected to catalyze 12 times of funding resources from the market.

The requested loan of $240 million will be from ADB's ordinary capital resources under ADB's LIBOR-based lending facility with a 0.15% commitment charge and a 25-year term including grace period of 5 years, and such other terms agreed in the FFA and under the loan agreement. The last date on which any disbursement request under this tranche is expected to be made on 14 December 2014.

IIFCL's project management unit (PMU), established under the IIPFF I, will continue to monitor day-to-day implementation of Tranche III including the identification, screening, selection, and monitoring of all subprojects, including compliance with state and national policies and the environmental and social safeguard framework. The indicative 7 subprojects under the proposed PFR3 were selected based on commercial and technical viability in compliance with relevant national and ADB norms. The tranche's loan proceeds will be disbursed in accordance with ADB's Loan Disbursement Handbook (2007, as amended from time to time). IIFCL requested retroactive financing for the PFR3. Except as otherwise agreed with ADB, it is proposed that the total eligible expenditure under retroactive financing will not exceed an amount equivalent to 20% of the individual loan and must have been incurred not more than 12 months before signing of the related legal agreements.

Project Rationale and Linkage to Country/Regional Strategy

IIPFF II is designed to support the Government's infrastructure development agenda. IIPFF II will provide funds at commercial terms with more than 20-year maturities for infrastructure PPP subprojects. Funds at such terms are currently not available in the domestic market. The global crisis has further constrained the availability of long-term funds in international capital markets. ADB's support to IIFCL will also encourage long-term investors to participate in IIFCL's market offerings.

Support for the IIPFF II is an integral part of ADB's sector strategy, including the India country partnership strategy 2009-2012 and ADB's Strategy 2020. It complements ADB's parallel initiatives in contractual savings, corporate bonds, PPP, and infrastructure development, all of which contribute to creating an enabling environment for infrastructure development in India. The IIPFF II is closely aligned with the development goal and targets set forth in the Government's 11th FYP.

Impact Containing and reducing fiscal deficit through private sector participation in infrastructure
Project Outcome
Description of Outcome Increased private sector participation in infrastructure projects, particularly through improved lending terms of IIFCL for PPP
Progress Toward Outcome

Private investment in infrastructure is contributing to the growth of India''s economy. The contribution of the private sector in the total investment in infrastructure in the first two years of the Eleventh Plan was 34.32% and 33.73% respectively.

Mobilization ratio increased to 11 times.

Implementation Progress
Description of Project Outputs

1. Provision of long-term credit by IIFCL to PPP infrastructure subprojects

2. Improved institutional capacity of IIFCL in areas of (i) governance framework, including risk management systems; and (ii) implementation of updated ESSF

Status of Implementation Progress (Outputs, Activities, and Issues)

Reduction in asset and liability tenor gap is being achieved for FY2009 -FY2013.

Around $7 billion (based on total project cost estimated at Rs429 billion) financed 16 subprojects under PPP modality.

Updated ESSF of IIFCL was approved by the board and subsequently uploaded in its website on Oct. 2013.

Geographical Location
Safeguard Categories
Environment FI
Involuntary Resettlement FI
Indigenous Peoples FI
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design For subprojects funded by IIFCL, compliance requirements will necessarily include conduct of stakeholder consultations on environmental and social safeguards issues. The consultations will assist the subproject developer in establishing an environmental impact assessment or the subproject information memorandum. Based on these, an environmental action plan, a resettlement plan, and a tribal development plan will be prepared with mitigations, wherever necessary.
During Project Implementation Stakeholders will be further consulted by ensuring that environmental and social safeguard requirements are continuously complied.
Responsible ADB Officer Cheolsu Kim
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
India Infrastructure Finance Company Limited8th Floor, Hindustan Times Building
Kasturba Gandhi Marg
New Delhi, India 110001
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 01 Dec 2011
Last Review Mission -
Last PDS Update 17 Mar 2014

Loan 2822-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
01 Dec 2011 21 Mar 2012 24 Apr 2012 14 Dec 2014 - 14 May 2014
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 240.00 Cumulative Contract Awards
ADB 240.00 01 Dec 2011 240.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 01 Dec 2011 240.00 0.00 100%

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
India Infrastructure Project Financing Facility II - Jabalpur Transmission Co. Ltd. Safeguards Due Diligence Reports Mar 2014
India Infrastructure Project Financing Facility II - Maharashtra Eastern Grid Power Transmission Company Limited Safeguards Due Diligence Reports Aug 2013
India Infrastructure Project Financing Facility II - Baharampore Farakka Highways Ltd. Environmental Monitoring Reports Apr 2013
India Infrastructure Project Financing Facility II: Social Safeguards Data Audit Sheets, L2822 (2012) Social Monitoring Reports Apr 2013
India Infrastructure Project Financing Facility II: Environmental Safeguards Data Audit Sheets, L2822 (2012) Environmental Monitoring Reports Apr 2013
India Infrastructure Project Financing Facility II - PFR3: Farakka-Raiganj Road Section Social Monitoring Reports Mar 2013
India Infrastructure Project Financing Facility II - Halol Godhra Shamlaji Tollways Environmental Monitoring Reports Sep 2012
India Infrastructure Project Financing Facility II - Ashoka Sambalpur Baragarh Tollway Pvt. Ltd. Environmental Monitoring Reports Aug 2012
India Infrastructure Project Financing Facility II - GVK Deoli Kota Expressway Pvt. Ltd. Safeguards Due Diligence Reports Jul 2012
India Infrastructure Project Financing Facility II - PFR3: Chilakaluripet-Nellore Road Section Social Monitoring Reports Jul 2012
India Infrastructure Project Financing Facility II: Four Laning of Pathankot- Amritsar section of NH-15 Environmental and Social Monitoring Reports Mar 2012
India Infrastructure Project Financing Facility II: Four Laning of Cuddapah- Kurnool section of NH 18 Environmental and Social Monitoring Reports Mar 2012
India Infrastructure Project Financing Facility II - Navayuga Quazigund Expressway Pvt. Ltd. Environmental Monitoring Reports Dec 2011
India Infrastructure Project Financing Facility II - Dhule Palasner Tollways Ltd. Environmental Monitoring Reports Sep 2011
India Infrastructure Project Financing Facility II - Soma Isolux Surat-Hazira Tollway Environmental Monitoring Reports Jul 2011
India Infrastructure Project Financing Facility II - Pune Solapur Expressway Pvt. Ltd. Environmental Monitoring Reports May 2011
India Infrastructure Project Financing Facility II - Soma Isolux Kishangarh Beawar Tollway Environmental Monitoring Reports Oct 2010

Evaluation Documents

See also: Independent Evaluation

No documents found.


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