India has decided to allow Japan Bank for International Cooperation (JBIG), a government-owned entity in that country, to hold 26 per cent equity in the Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC). The Cabinet today approved a proposal on equity restructuring in DMICDC. The equity will be given from the stake of Life Insurance Corporation and India Infrastructure Finance Limited, which currently own 51 per cent stake in the corporation. The Centre’s stake will be capped at the existing 49 per cent. DMIC project, touted as a strategic partner-ship project between India and Japan, is being developed as a global manu-facturing and investment destination, utilising the high capacity 1,483-km-long western Dedicated Railway Freight Corridor as the backbone.
Participation of JBIG in DMICDC will enable the DMIC project to leverage the active assistance and cooperation of the government of Japan, an official statement said. Subscription in the equity of DMICDC will increase the confidence of Japanese companies in the project and strengthen the ties with the government of Japan, it added.
This may also pave the way for Japanese experts to come to DMICDC. Long-term financing institutions in Japan like pension funds have limited experience in India, and 26 equity equity would give these entities comfort level and a feeling of participation in the project.
This would open up possibilities for long-term infrastructure lending at lower rates, the statement said.
DMICDC was incorporated in 2008 with an authorised equity base of Rs 10 crore. Subsequently, a request was received from Japan for 26 per cent participation in the equity of DMICDC. During the Japanese Prime Minister Yoshihiko NodaRs s visit to India in December 2011, Japan offered to match the government of IndiaRs s contribution to DMIC Project by announcing a contribution of $ 4.5 billion.
