IIFCL gets US$300 million support

India has signed three US$574 million loans with the Asian Development Bank, supporting India Infrastructure Finance Company Limited (IIFCL) as well as projects in Tamil Nadu and Himachal Pradesh.

A US$300 million Loan Agreement to support lending by IIFCL for long-term finance of Public Private Partnership (PPP) projects.

Speaking on the occasion, Sameer Kumar Khare, Additional Secretary (Fund Bank and ADB), Department of Economic Affairs, said the lending will also improve operational capacity of IIFCL, and expand the portfolio of infrastructure financing instruments available to IIFCL.

The loan is expected to compliment Government’s infrastructure building efforts.

Kenichi Yokoyama, Country Director of ADB’s India Resident Mission who signed the agreement for ADB, added the funding is for at least 13 sub-projects through IIFCL, involving roads and renewable power generation, under the last tranche.
The loan project supports the renewed effort of the Indian Government in accelerating infrastructure growth through increased private sector investment.

The US$300 million ADB loan is expected to help catalyze the financial closing of US$2.4 billion in investments.

In addition, the attached technical assistance will support IIFCL capacity development and will focus on IIFCL’s financial management and social and environmental safeguards.

Tamil Nadu

A US$169 million loan is a First Tranche of a US$500 million multi-tranche financing to develop climate-resilient water supply, sewerage, and drainage infrastructure in at least 10 cities in Tamil Nadu.

The ADB program forms part of its support to the state’s “Vision Tamil Nadu 2023” to provide universal access to water and sanitation and to develop world-class cities in high-performing industrial corridors.

Though Tamil Nadu is the most urbanized of India’s large States, urban service levels remain low, with less than half of households served by piped water, only 42% of households are covered by a sewerage network, with 43% of sewage disposed directly into waterways untreated.

The program will develop climate-resilient sewerage collection and treatment and drainage systems in 10 cities and install the country’s first solar-powered sewage treatment plant.

Introduction of smart water management systems will help reduce non-revenue water and strengthen operational efficiency. Around 4 million people will benefit from piped water and sewerage connections and improved drainage.

The program will boost institutional capacity, public awareness, and urban governance as part of a comprehensive approach for developing livable cities.

The First Tranche Loan will target the cities of Chennai, Coimbatore, Rajapalayam, Tiruchirappalli, Tirunelveli, and Vellore.

A US$2 million grant from the Asian Clean Energy Fund, established by the Japanese Government, will fund the solar energy pilot project. An ADB technical assistance grant of $1 million will accompany the program to support capacity building.

Himachal Pradesh

A US$105 million loan is to continue financing the transmission system upgrades in Himachal Pradesh for increased supply of hydropower to the state and the national grid.

The tranche 3 loan is part of the US$350 million multi-tranche financing facility (MFF) for Himachal Pradesh Clean Energy Transmission Investment Program approved by the ADB Board in September 2011.

The program is aimed at developing and expanding the transmission network to evacuate clean and renewable power generated from hydropower sources to load centers within and outside the State.

It also supports the institutional capacity development of the state transmission utility, Himachal Pradesh Power Transmission Corporation Limited (HPPTCL), as the executing agency for this project.

The loan will have a 25-year term, including a grace period of 5 years, an annual interest rate determined in accordance with ADB’s lending facility based on the London interbank offered rate (LIBOR), and a commitment charge of 0.15% per year.

“This particular loan will help Government of Himachal Pradesh to benefit electricity consumers in the state and throughout northern India, by increasing the transmission system capacity for inflow of the hydropower generated in the state into India’s national grid,” said Khare, after signing the loan agreement on 16 Nov 2018.

“This last tranche will help sustain confidence among existing and potential hydropower developers about the availability of sufficient transmission capacity for evacuation of power from hydropower generation sources in Himachal Pradesh,” said Yokoyama.

The loan will have a 25-year term, including a grace period of 5 years, an annual interest rate determined in accordance with ADB’s lending facility based on the London interbank offered rate (LIBOR), and a commitment charge of 0.15% per year.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.

Established in 1966, it is owned by 67 members — 48 from the region. In 2017, ADB operations totaled US$32.2 billion, including US$11.9 billion in co-financing. fiinews.com