IIFCL’s London arm has added four new sectors that can obtain foreign currency loans, which are provided in the form of external commercial borrowing to support infrastructure projects in India.
The new sectors to be funded by IIFC (UK)—a wholly-owned London subsidiary of IIFCL—are communication (mobile telephony services/companies providing cellular services), refining, mining and exploration. The sectors were approved for inclusion by the board of IIFC (UK) at a meeting in London earlier this month.
Steps will now be initiated to include these sectors in the domestic scheme—SIFTI (Scheme for Financing viable infrastructure projects through IIFCL), Harsh Kumar Bhanwala, officiating Chairman & Managing Director of IIFCL, told Business Line here.
India Infrastructure Finance Company Ltd (IIFCL), which started operations from April 2006, has been lending under the Government’s SIFTI scheme.
IIFC (UK) borrows funds from the Reserve Bank of India and lends to Indian companies implementing infrastructure projects in India. IIFC (UK)’s credit operations are also governed by SIFTI and its lending is in compliance with RBI’s ECB guidelines. Also, the financing is only for import of capital equipment and machinery.
Interestingly, the RBI had in August this year approved these four sectors as eligible for ECB financing under infrastructure.
Meanwhile, Financial Services Secretary, Rajiv Takru, has advised IIFC (UK) to conduct roadshows across India to spread awareness about the beneficial funding terms.
Besides long-term ECB funding for import of capital goods, the loans are being offered at competitive interest rates (six-month USD LIBOR + 200-250 basis points), it was pointed out.
Takru has urged project developers to use the long-term ECB facility offered by IIFC (UK) as the facility is available for a limited period at a reasonable cost to support the projects.
The first roadshow was recently held at Mumbai. The other cities where roadshows will follow are Delhi and Hyderabad, it is learnt.