IL&FS Infrastructure Debt Fund (IIDF) today signed a Memorandum of Understanding (MoU) with five public sector general insurance companies to develop infrastructure sector in the country.
"IL&FS signed a MoU to document understanding between IL&FS IDF and five public sector general insurance companies- General Insurance Corporation of India National Insurance Company, Oriental Insurance Co, New India Assurance Co and United India Insurance Co to jointly facilitate business of IDF and in the process contribute their bit to the development of infrastructure sector in India," statement from the Finance Ministry said.
The MoU, signed in the presence of Economic Affairs Secretary Arvind Mayaram and Chief Executive Officers of all five general insurance companies and IL&FS, seeks to send strong signal to foreign sovereign funds/pension funds to start investment in India's infrastructure sector.
Mayaram said that Infrastructure Debt Funds (IDF) is an innovative idea to pool low cost long term finances for infrastructure projects.
He emphasised that pension funds and insurance companies are expected to play a vital role in pooling the finance in the sector.
LIC has already invested Rs 125 crore in the first scheme of IL&FS IDF, which was closed in Dec 2013.
"Each insurance company has agreed to invest up to 20 per cent of the corpus of each scheme in IL&FS IDF (IIDF). LIC has also agreed for 2 per cent equity stake in AMC managing IIDF," it said.
The release also said that a close ended scheme (s) with maturities 5-15 years will be coming out soon.
"Investment shall be in local currency only and these units shall be listed in stock exchange," it added.
