Chidambaram to inaugurate British branch of IIFC

April 10th, 2008 - 11:20 am ICT by admin  

London, April 10 (IANS) Finance Minister Palaniappam Chidambaram is to inaugurate the operations of a government lending agency in Britain Thursday as part of plans to raise capital for Indian infrastructure projects. India Infrastructure Finance Company (UK) Ltd., an offshore subsidiary of IIFCL, was set up Feb 7 and Chidambaram informed the parliament of its formation in his budget speech later that month.

The aim of the company is to borrow funds from the Reserve Bank of India (RBI) from its forex reserves and lend in foreign currency to Indian companies implementing infrastructure projects in India.

According to Planning Commission projections, the Indian infrastructure sector will need funds of around $492 billion over the next five years, rising to $1.48 trillion in the next five years.

The company will help Indian companies import capital goods in sectors such as power, airports, ports and roads, limiting lending to capital expenditure outside India.

“The financial assistance from the new company is expected to shore-up funds availability for the infrastructure sector and pave the way for creation of world-class infrastructure in India,” the government said in a statement.

Since its creation in January 2006, IIFCL, a wholly owned government enterprise, has approved 78 infrastructure projects with a loan commitment of over $4.25 billion. These projects involve an aggregate project cost of over $32 billion.

IIFCL provides debt of long-term maturity of over 10 years to the public sector and public private partnerships.

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