New Delhi, June 17, 2005
— The International Finance Corporation, the private sector financing arm of the World Bank Group, has signed an agreement to provide $50 million in long-term debt financing to the Infrastructure Development Finance Company Limited. IFC is also an existing shareholder in IDFC with an equity stake of around 6 percent.
IDFC is a specialized financial intermediary with a mandate to provide financing to commercially viable infrastructure projects in India. In addition to funding activities, IDFC performs a policy advisory role by assisting India’s central and state governments in preparing road maps for reform initiatives and to develop the regulatory framework. The company’s asset growth has been significant during the past two years, partly reflecting improvements in the regulatory framework for infrastructure in India.
Mr. Iyad Malas, IFC director for South Asia, noted, “India’s infrastructure needs are massive and estimated at over $150 billion over the next decade. Given the limited public funding available for infrastructure, we believe that private sector involvement in this sector is extremely critical. We expect IDFC to play a key role in financing private infrastructure over the coming years.”
“As a long-term partner in IDFC, we are very keen to support its growth,” said Mr. Jyrki I. Koskelo, IFC director for global financial markets. “IFC’s loan will expand IDFC’s financing capacity, thereby promoting the implementation of private infrastructure projects. Moreover, in an emerging market country such as India, development of private infrastructure is central to IFC’s mission.”
Mr. Rajiv Lall, CEO and managing director of IDFC, pointed out, “We can greatly benefit from IFC’s vast experience in emerging market project finance. We look forward to continuing this mutually beneficial relationship.”
The mission of IFC (
www.ifc.org)
is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
