Tuesday, June 10, 2008

India Infrastructure Finance Company Limited (IIFC)

IIFC is expected to provide long-term debt for financing infrastructure projects for a longer duration. It lends upto 20% of the capital costs of a project. Special preference is given to PPP projects.
Similar initiative for PPP is India Infrastructure Project Development Fund. Details are in my earlier post.
Some differences between the two can be spotted out from their guidelines.
  1. The IIPDF will be available to finance an appropriate portion of the cost of consultants and transaction advisors on a PPP project and IIFC provides Long term debt for infrastructure projects.
  2. The IIPDF would assist ordinarily up to 75% of the project development expenses and IIFC will lend upto 20% of the capital costs of a project
  3. The assistance from IIPDF is in the form of interest free loan which will be recovered on successful completion of bidding process and for IIFC the rate of interest charged shall cover the funding costs including administrative costs and guarantee fees .
  4. Proposals without Viability Gap Funding can also be submitted for funding under IIPDF and under IIFC only commercially viable projects can avail this facility or the projects which become viable after the viability gap funding. This presentation (slide 9) gives details on VGF and IIFC.
  5. Eligibility:Proposals for funding under IIPDF would cover the entire gamut of PPPprojects, i.e. Build Operate Transfer (Toll), BOT (Annuity), long term management contracts etc. whereas under IIFC a project shall meet the following crieteria:The project shall be implemented (i.e. developed, financed and operated for the Project Term) by:
    (i) A Public Sector Company;
    (ii) A Private Sector Company selected under a PPP initiative; or
    (iii) A Private Sector Company.

More details about IIFC are here and on IIFC website .