IIFCL to launch $1 billion infra debt fund

Sebi's nod expected soon, company wants 50% of the fund to come from FIIs

India Infrastructure Finance Company (IIFCL) today said it will launch a $1 billion infrastructure debt fund, for which final approval from market regulator Sebi is expected soon.

"We have got an in-principle approval from Sebi for our $1 billion infra debt fund...All the formalities have been complied with and now it is in final stages of approval with the regulator...We expect it to be approved soon," IIFCL Chairman and Managing Director SK Goel told PTI.

"We want at least 50% of this fund [$500 million] to come from Foreign Institutional Investors [FIIs], and we are in talks with Asian Development Bank [ADB], HSBC and Barclays, among others, for the purpose," he said.

Meanwhile, in a bid to develop bond market in India, the infra space lender has proposed to launch a new scheme - Credit Enhancement - in assistance with the Asian Development Bank from January next year.

"The scheme would facilitate launch of bonds by the private developers, on guarantees backed by IIFC, having due insurance cover from ADB," a company official said.

"The first bond, through this credit enhancement scheme, by a private developer group, GMR, is expected to hit the markets in January," Goel said.

IIFC, a wholly-owned GoI company, was formed through a special arrangement, to promote infra sector by offering long term loans (25-30 years), is gearing up to meet the investment projections.

IIFC has acquired 41% equity in Delhi Mumbai Industrial Corridor Development Corporation (DMICDC), nodal agency for Delhi Mumbai Industrial Corridor (DMIC), in which infra projects of $90 billion are expected to come up across six states.