World Bank’s private sector lending arm, International Finance Corporation (IFC), has said two funds supported by it are ready to pick up equity worth $1.7 billion (about Rs 8,500 crore) in infrastructure projects in India, a move that will help the country’s economy arrest the impact of the global financial meltdown.
“We have mobilised $1.7 billion. The funds are expected to generate a total investment of $5-8 billion over the next three-five years,” said Anita George, IFC’s director for infrastructure (Asia and Africa).
The funds, she said, would be used in picking up equity in the infrastructure sector projects and would be in addition to the regular operations of IFC in the country.
Out of the $1.7 billion, she said, IFC has mobilised $1 billion through Macquarie-SBI Infrastructure Fund and $700 million from IDFC-promoted India Infrastructure Fund. IFC has invested a total of $200 million in these two funds. Macquarie-SBI Infrastructure Fund is a tri-party joint venture between public sector State Bank of India, Australia-based Macquarie Group and IFC.
“IFC’s contribution to creating these two funds is part of its counter-cyclical investment strategy to boost economy. These funds will help India sustain infrastructure investments in power, toll roads, ports, water, and waste management and help generate jobs and enhance incomes,” she added.
George said that the asset management companies, which are managing the funds, are in the process of identifying the infrastructure projects and would soon start disbursing money.
“Infrastructure is a key priority for India,” she said.
“Moreover, infrastructure development has a multiplier effect. Investment in infrastructure acts as a stimulus with outcomes across related sectors and industries resulting in important impacts toward reducing poverty and encouraging growth,” she added.