World Bank to lend additional $3 bn to IndiaDecember 18th, 2008 - 9:25 pm ICT by IANS
New Delhi, Dec 18 (IANS) The World Bank has agreed to help India with $3 billion of increased investment as the global financial crisis undermines private financing for the country’s much-needed infrastructure agenda, the bank announced Thursday. “Part of the additional financing include a line of credit to the India Infrastructure Finance Company Limited (IIFCL) to help finance private-public partnerships in infrastructure; funding for the Small Industries Development Bank of India (SIDBI) to provide credit to small and medium enterprises, and assistance to PowerGrid to expand its transmission network,” the World Bank said in a written statement.
The development institution has provisioned this additional amount as part of the total financing envelope of $14 billion proposed in the India Country Strategy over 2009-2011.
India had requested an additional $5.6 billion over the next two years. Having provisioned the $3 billion, the World Bank said it would need to examine the balance $2.6 billion and work with the Indian government over the coming weeks to clarify details.
The strategy, which is geared to help India propel infrastructure development, support the country’s seven poorest states, and respond to the financial crisis, was discussed by the World Bank board last week in Washington DC.
“Other areas which could receive support from additional financing include the National Housing Bank and the recapitalisation of state banks, the details of which are yet to be discussed with the government of India,” the statement said.
The statement said that India was the largest borrower from the World Bank’s International Development Association (IDA) and second largest borrower from its International Bank for Reconstruction and Development (IBRD) in fiscal 2008.
The World Bank’s $15.1 billion-portfolio in the country covers 61 active investment projects.
In the current financial year, the World Bank’s oard approved $2.7 billion in funding for nine new projects for India spanning a range of sectors including infrastructure, education, health and rural development. Of this, $1.3 billion came from IBRD and $1.4 billion came as interest-free credits from IDA.