IFC keen to lend more

The International Finance Corporation(IFC),World Bank's private lending arm, today said it was keen to increase its exposure in India from the present $300 million to $ 500 million annually over the next five years.

"India is third largest in terms of IFC's annual commitment. We hope to increase it substantially from $ 300 million to $ 500 million in five years," IFC's Chief Economist Michael Klein told reporters at a seminar here today.

Klein said the exposure would include equity investments, debt and guarantees to Indian companies.

When asked to specify sectors, Klein said the agency was keen to invest in Indian companies with overseas operations ,in sectors like infrastructure, information technology, retail, telecom and manufacturing. He added that the agency was planning to go to other cities especially in the south rather than restrict itself to Mumbai and Delhi.

Klein, who will meet Deputy Chairman of the Planning Commission Montek Singh Ahluwalia later in the day to discuss the government's proposal to set up a special purpose vehicle(SPV) for providing long-term funds for infrastructure, said he was of the view that the SPV should be allowed to draw dollars if rupee loans proved insufficient.

He, however, did not subscribe to the fact that the Reserve Bank of India should invest its forex reserves in infrastructure projects instead of investing in treasury bills.

"If someone wants to raise resources, they can get dollars as and when the investment takes place," he said adding that government guarantees should be extended for covering political risks.

Asked if the infrastructure sector fell in that category, Klein said there was a case for government guarantees in the context of roads and power, particularly with regard to state electricity boards,but telecom did not fall into the category.

Laying emphasis on the infrastructure sector, Klien said, there was a need to impose user charges especially on electricity and water to make projects viable.