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WASHINGTON, D.C., Oct. 17—The International Finance Corporation (IFC) has approved an equity investment of US$20 million in the Infrastructure Development Finance Corporation (IDFC), a specialized financial intermediary in India. IDFC will provide long- term debt financing for private infrastructure projects, including power, roads, ports, telecommunications, and urban infrastructure.
Established as a partnership between the government of India and private sector interests, IDFC will focus on the development of local long-term bond markets, the absence of which has been a major constraint to private sector infrastructure investments in India.
"Through its mix of significant private ownership and government support, IDFC is a unique institution to channel private capital flows on commercial terms for infrastructure projects," said Mr. Rashad Kaldany, Director of IFC's Asia II Department. "We expect it to set new directions in risk mitigation, product development and policy advice in the financial and infrastructure sectors.
"Increasing economic growth rates in India will require massive investments in infrastructure over the next ten years," added Mr. Vivek Tavaldkar, Director of IFC's Power Department. "IFC will use its extensive experience in financing private infrastructure to help IDFC develop a business strategy and operational framework that meets this critical need."
To date, IFC has approved investments of more than US$2.5 billion in 155 companies in India, including nearly US$500 million in the financial sector and over US$945 million in infrastructure projects.
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
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