ADB is helping India accelerate its rollout of infrastructure projects through public-private partnerships. The project will help state-owned India Infrastructure Finance Company Ltd. (IIFCL) support investments in a broad range of infrastructure projects by providing long-term financing on commercial terms with more than 20-year maturities, which are otherwise not available in the market.
|Project Name||MFF - Second India Infrastructure Project Financing Facility (IIPFF II) - PFR3|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|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|
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|
|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.
|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 $7 billion (based on total project cost estimated at Rs429 billion) financed 16 subprojects under PPP modality.
Updated ESSF of IIFCL was approved by the board and subsequently uploaded in its website on Oct. 2013.
|Geographical Location||Administrative unit not available, Administrative unit not available, Ajmer, Amritsar, Aurangabad, Baragarh, Bhilwara, Bilaspur, Cuddapah, Dahod, Damoh, Dhule, Dindori, Gondiya, Guntur, Gurdaspur, Jabalpur, Katni, Kawardha, Kolhapur, Korba, Kota, Kurnool, Murshidabad, Nagpur, Nandurbar, Navsari, Nellore, Panch Mahals, Prakasam, Pune, Raigarh, Sabar Kantha, Sagar, Sambalpur, Solapur, Surat, Uttar Dinajpur, Wardha|
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||For subprojects funded by IIFCL, compliance requirements will necessarily include conduct of stakeholder consultations on environmental and social safeguards issues. The consultations will assist the subproject developer in establishing an environmental impact assessment or the subproject information memorandum. Based on these, an environmental action plan, a resettlement plan, and a tribal development plan will be prepared with mitigations, wherever necessary.|
|During Project Implementation||Stakeholders will be further consulted by ensuring that environmental and social safeguard requirements are continuously complied.|
|Responsible ADB Officer||Kim, Cheolsu|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Public Management, Financial Sector and Trade Division, SARD|
India Infrastructure Finance Company Limited
10th Floor, Jeewan Prakash Building
25 Kasturba Gandhi Marg
New Delhi, India 110001
|Approval||01 Dec 2011|
|Last Review Mission||-|
|Last PDS Update||17 Mar 2014|
|Approval||Signing Date||Effectivity Date||Closing|
|01 Dec 2011||21 Mar 2012||24 Apr 2012||14 Dec 2014||-||14 May 2014|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||240.00||Cumulative Contract Awards|
|ADB||240.00||01 Dec 2011||0.00||0.00||0%|
|Cofinancing||0.00||01 Dec 2011||240.00||0.00||100%|
|Status of Covenants|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
|Title||Document Type||Document Date|
|Guarantee Agreement for Second India Infrastructure Project Financing Facility - Project 3 between India and Asian Development Bank dated 21 March 2012||Guarantee Agreements||Apr 2012|
|Loan Agreement for Second India Infrastructure Project Financing Facility - Project 3 between Asian Development Bank and India Infrastructure Finance Company Limited dated 21 March 2012||Loan Agreement (Ordinary Resources)||Apr 2012|
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.
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
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