India: Accelerating Infrastructure Investment Facility in India - Tranche 1

Sovereign Project | 47083-002 Status: Approved

Summary

ADB is helping India to accelerate infrastructure development through increased private sector investment. The financial intermediary loan to state-owned Infrastructure Finance Company Ltd will support public-private partnership (PPP) projects in road, railway, airport, urban infrastructure, and power, including renewable energy.

Latest Project Documents

Consulting Notices See also: CMS

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Procurement Notices See also: Operational Procurement

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Procurement Documents

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Project Name Accelerating Infrastructure Investment Facility in India - Tranche 1
Project Number 47083-002
Country India
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3048-IND: Accelerating Infrastructure Investment Facility in India - Tranche 1
Ordinary capital resources US$ 400.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Finance - Infrastructure finance and investment funds

Gender Equity and Mainstreaming No gender elements
Description

Project 1 (Tranche 1) involves a financial intermediary loan of $400 million from the ordinary capital resources of the Asian Development Bank to India Infrastructure Finance Company Limited, to be guaranteed by India, to support renewed government efforts to accelerate infrastructure growth through increased private sector investment given competing pressures on fiscal resources.

The loan supports for financing of public-private partnership (PPP) infrastructure projects through (i) direct lending; (ii) take-out financing; and (iii) subordinate debt, all in line with IIFCL's operational mandates.

Project Rationale and Linkage to Country/Regional Strategy Infrastructure deficit of India is arguably the critical development challenge facing the country. The weak state of infrastructure represents a drag on higher, sustainable gross domestic product (GDP) growth reflecting supply side constraints and stymies economic development, and with it, poverty alleviation efforts. In order to meet the growing aspirations of its citizens including better service delivery, India will have to identify new means to expand infrastructure financing given limits on fiscal space, external commercial borrowing, and bank balance sheets. The solution to overcoming these limits lies in part on increasingly leveraging private capital. To achieve the targeted real GDP growth rate of 8.4% in the Twelfth Five-Year Plan, the government estimates a required infrastructure investment at around $1 trillion. Of this amount, approximately 47% is targeted to come from private capital as compared to around 38% under the Eleventh Five-Year Plan, and 22% under the Tenth Five-Year Plan. The government has identified the need for further reforms to enhance private sector participation in infrastructure. These include strengthening PPP support, promoting project finance schemes in infrastructure development, and developing new sources of take-out, and project bond financing including infrastructure debt funds. With these reforms in place, the government plans to accelerate the infrastructure investment to above 9% of GDP during the Twelfth Plan compared with 7% during the Eleventh Plan. In this context, the government has targeted IIFCL, an apex organization established for promoting PPP infrastructure projects, to play a larger role in the infrastructure financing space.
Impact

Project Outcome

Description of Outcome Facilitated private sector investment in infrastructure PPPs
Progress Toward Outcome As of 29 Feb. 2016, IIFCL has availed USD 370.6 million out of the USD400 million tranche.
Implementation Progress
Description of Project Outputs

1. Enhanced availability of long-term finance for PPP subprojects

2. Improved project management

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

As of 29 Feb. 2016, IIFCL has availed USD 370.6 million out of the USD400 million tranche.

Implementation ongoing.

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

This is the first tranche of the facility which is a sequel to two earlier facilities - India Infrastructure Project Financing Facility I and II. This is in response to the vast infrastructure needs of India estimated at around $1 trillion and a continuing need to develop new models for infrastructure financing suitable to the Indian context and to further strengthen existing modalities. This facility will continue the success of the two earlier facilities while piloting new modalities for infrastructure financing through loan proceeds.

This facility will support public-private partnership (PPP) in infrastructure under (i) direct on-lending in the form of senior and subordinate debt to subprojects in line with IIFCL's mandate ("Scheme") and (ii) take-out financing. This will also broaden the scope from the previous facilities which, aside from take-out financing would also include renewable and clean energy projects and initiatives in the lagging states. This aspect will support the government's efforts in meeting growth targets, expand PPP initiatives and foster inclusive growth.

During Project Implementation

ADB will, at its discretion, conduct reviews of the management, financial, and operational performance of the borrower and subprojects financed under the AIIFI initially after the closing of withdrawals. The review will include procurement procedures utilized by the AIIFI-financed infrastructure projects.

The performance of AIIFI will be reviewed periodically at three levels - by IIFCL, (through the PMU on a quarterly basis), semi-annually by IIFCL's Board of Directors, and annually by ADB, and at the tripartite review meetings among GOI, ADB, and IIFCL. The review of performance for each quarter by the PMU will be completed by the 10th day of the month following the quarterly review. IIFCL's Board of Directors will review the performance semi-annually and will forward the semi-annual progress reports to ADB by the 10th day of the month following the semi-annual review. ADB will review the quarterly progress and semi-annual reports during the annual review missions and during the tripartite reviews chaired by the Government. In addition, a midterm review of the investment program will be conducted in FY2013-FY2018. The review will cover contract awards and disbursement, implementation progress including progress against institutional development and capacity building milestones, social and environmental aspects, and the status of the IPPMS. The midterm review will identify problems or weaknesses in the implementation arrangements, suggest nominal changes in scope, outputs, and due diligence, and agree on suggested changes.

Business Opportunities

Consulting Services n/a
Procurement All procurement to be financed under an ADB loan will be carried out in accordance with ADB's Procurement Guidelines (2013, as amended from time to time). ADB will encourage IIFCL to require its subborrowers to adopt internationally competitive bidding procedures to the extent possible when the amount of the investment is unusually large and economy and efficiency can be gained by following such procedures. For procurement of goods and services to be financed by subloans from the ADB loan, IIFCL will ensure that the price paid is reasonable and that account is taken of factors such as time of delivery, efficiency, and reliability. For build-operate-transfer projects and their variants, if the subproject sponsor or engineering procurement and construction contractor is selected through competitive bidding among international entities in accordance with procedures acceptable to ADB, such engineering procurement and construction contractor may apply its own procedures for procurement provided that such procurement is for goods, services, and works supplied from or produced in ADB member countries.

Responsible Staff

Responsible ADB Officer Vivek Rao
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
India Infrastructure Finance Company Limited
10th Floor, Jeewan Prakash Building
25 Kasturba Gandhi Marg
New Delhi, India 110001

Timetable

Concept Clearance -
Fact Finding -
MRM 09 Aug 2013
Approval 21 Oct 2013
Last Review Mission -
Last PDS Update 21 Mar 2016

Loan 3048-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
21 Oct 2013 22 Jan 2014 21 Feb 2014 31 Dec 2016 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 400.00 Cumulative Contract Awards
ADB 400.00 21 Oct 2013 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 21 Oct 2013 393.26 0.00 98%

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Accelerating Infrastructure Investment Facility in India - Tranche 1: Mihit Solar Power Private Limited Environment and Social Due Diligence Report Safeguards Due Diligence Reports Jun 2016
Accelerating Infrastructure Investment Facility in India - Tranche 1: Environment and Social Safeguards Audit Sheets (January-December 2014) Environmental and Social Monitoring Reports May 2016
Accelerating Infrastructure Investment Facility in India - Tranche 1: Uttar Urja Projects Private Limited Environment and Social Due Diligence Report Safeguards Due Diligence Reports Feb 2016
Accelerating Infrastructure Investment Facility in India - Tranche 1: Yamuna Expressway (Jaypee Infratech Limited) Environment and Social Due Diligence Report Safeguards Due Diligence Reports Nov 2015
Accelerating Infrastructure Investment Facility in India - Tranche 1: 25 MW Sandland Real Estates Pvt. Ltd. Environment and Social Due Diligence Report Safeguards Due Diligence Reports Oct 2015
AIFFI Tranche 1 - Transmission System for Northern Region System Strengthening Scheme (NRSS) XXXI B Subproject: Environmental and Social Safeguards Due Diligence Report Safeguards Due Diligence Reports Sep 2015
Accelerating Infrastructure Investment Facility in India - Tranche 1: Dreisatz Mi Mysolar24 Private Limited and Mi Mysolar24 Private Limited Environment and Social Due Diligence Report Safeguards Due Diligence Reports May 2015
Accelerating Infrastructure Investment Facility in India - Tranche 1: Kiratpur Ner Chowk Expressway Ltd. Environment and Social Due Diligence Report Safeguards Due Diligence Reports Feb 2015
Accelerating Infrastructure Investment Facility in India - Tranche 1: Hazaribagh Ranchi Expressways Limited Environment and Social Due Diligence Report Safeguards Due Diligence Reports Dec 2014
Accelerating Infrastructure Investment Facility in India - Tranche 1: Sai Maatarini Tollways Ltd. Environment and Social Due Diligence Report Safeguards Due Diligence Reports Nov 2014
Accelerating Infrastructure Investment Facility in India - Tranche 1: Etawah Chakeri (Kanpur) Highways Pvt. Ltd. Environment and Social Due Diligence Report Safeguards Due Diligence Reports Sep 2014
Accelerating Infrastructure Investment Facility in India - Tranche 1: Chetak Tollways Ltd. Environment and Social Due Diligence Report Safeguards Due Diligence Reports Sep 2014
Accelerating Infrastructure Investment Facility in India - Tranche 1: MEP Infrastructure Private Limited Environment and Social Due Diligence Report Safeguards Due Diligence Reports Jan 2014
Accelerating Infrastructure Investment Facility in India - Tranche 1: GMR Hyderabad International Airport Limited Environment and Social Due Diligence Report Safeguards Due Diligence Reports Jan 2014
Accelerating Infrastructure Investment Facility in India - Tranche 1: ACP Tollways Pvt. Ltd. Environment and Social Due Diligence Report Safeguards Due Diligence Reports Jan 2014
Accelerating Infrastructure Investment Facility in India - Tranche 1: BSCPL Aurang Tollway Limited Environment and Social Due Diligence Report Safeguards Due Diligence Reports Dec 2013
Accelerating Infrastructure Investment Facility in India - Tranche 1: GVK Bagodara Vasad Expressway Pvt. Ltd. Environment and Social Due Diligence Report Safeguards Due Diligence Reports Dec 2013

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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