shares his experience in infrastructure financing business. What are the obstacles in financing infrastructure projects?
Although no major obstacles in financing of infrastructure is seen, issues like standardizing documents and processes, improving resource efficiency, accelerating PPP projects through appropriate policy and regulatory framework, achieving optimal risk allocation, development of bankable and financially sustainable models and developing world class infrastructure in a cost-effective manner need to be addressed.
How do you think banks can increase infrastructure financing?
Finance provided by banks to infrastructure sector has been showing consistent increase. It has increased from Rs 51,314 crore at the end of March 2004 to Rs 79,009 crore at end March 2005 and further to Rs 1,08,787 crore at end March 2006.
This indicates that banks are increasing their exposure to infrastructure sector through long term financing. Considering the huge funding requirements of the infrastructure sector, significant opportunities exist for banks to optimize mix of their credit portfolio and this could also be achieved by tying with companies like IIFCL which focuses exclusively on the infrastructure sector.
How much IIFCL is planning to borrow from market this fiscal?
Keeping with its aim of touching loan approvals of Rs 15,000 crore during 2007-08, the company has structured and posed various borrowing proposals from within the country and abroad.
The company's proposals for long term borrowings from the World Bank, Asian Development Bank and Kreditanstalt for Wiederaufbau (KfW) are at different stages of approval.
How much credit IIFCL has sanctioned and disbursed till now?
IIFCL, which commenced its operations in March 2006, has been focusing on fulfilling its mandate to finance infrastructure projects in the country. Since commencement of business, the company has sanctioned 57 loan proposals amounting to Rs 12,478 crore.
Disbursements amounting to Rs 416 crore has so far been made. It may be mentioned that disbursements in infrastructure projects picks up towards the mid and latter part of the project implementation and as such, the company expects that the drawdowns will pick up momentum in the near term.
How much credit is likely to be extended by IIFCL in 2007-08?
During the year 2007-08, the company has envisaged loan approvals to the tune of Rs 15,000 crore. As mentioned above, the company expects disbursements to pick up pace during the current year.
How many projects IIFCL is financing at the moment?
At present, IIFCL is financing 57 projects spread over 18 states of the country.
What kind of projects are likely to be financed by IIFCL in 2007-08?
During 2007-08, the company is likely to finance different projects in road, power, solid waste management, urban infrastructure and airport and port sectors.
Keeping with its mandate, the company has financed various projects in road, airport, port, power and urban infrastructure sectors.
Will the $20 million ECB (applicable for fresh proposals) cap for rupee spending impact IIFCL's plans? Any plan to request the RBI for relaxation of the norm for IIFCL?
The company has been accorded approval by the RBI to raise external commercial borrowing of $500 million during the year and the process thereof has already been initiated.
