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IFC launches $2.5bn program to fund India's infrastructure
21
Aug '14
To strengthen capital markets and support infrastructure development in India, IFC, a member of the World Bank Group, unveiled a $2.5 billion or Rs 15,000 crore rupee financing program.

Over the next five years, IFC will utilise a combination of swaps and rupee-denominated bonds and raise local-currency financing of up to $2.5 billion to be used for infrastructure investments in India.

IFC says, deep, liquid domestic capital markets ensure access to long-term, local-currency finance for the private sector—the key engine of job creation in emerging markets and they also mobilize long-term funding for priority sectors such as infrastructure.

In fiscal year 2013-14, IFC invested $1.2 billion in India to achieve strategic priorities of providing counter-cyclical support to infrastructure, promoting financial inclusion and enhancing access to quality and affordable healthcare to the under-served.

IFC also issued a $1 billion offshore global bond program linked to the rupee exchange rate last year. Under the program, IFC offered six separate issuances between November 2013 and April 2014; four with maturities of three years, one of five years, and the final tranche of seven years.

This set a benchmark for different tenors in the markets and extended the offshore rupee yield curve from less than three years to seven. The bonds attracted a broad range of international investors.

“Vibrant capital markets provide critical access to finance for the private sector and bonds offered under IFC’s rupee financing program, offer a safe investment alternative for domestic pension funds and other investors, while mobilizing capital to address India’s infrastructure needs”, said IFC CEO Jin-Yong Cai.

“Issuance of onshore bonds by IFC in the Indian bond market, with offer of longer tenor bonds, will deepen the bond market and also provide much needed finance to infrastructure projects,” informs Dr. Arvind Mayaram, Finance Secretary in India’s Ministry of Finance.

Working with private enterprises in about 100 countries, IFC uses its capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In 2013-14, IFC provided more than $22 billion in financing to tackle the most urgent challenges of development.

Fibre2fashion News Desk - India

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