FM launches first Infrastructure Debt Fund

IDF is promoted jointly by IL&FS group and LIC

Finance minister P Chidambaram.today launched the first infrastructure debt fund (IDF) of the country. This IDF is promoted jointly by IL&FS group and LIC.

According to Chidambaram this launch would go in the long way to promote infrastructure sector in the country.
"This (launch of IDF) is an important step in our effort to promote infrastructure sector in this country" he said. It will also bring down cost of infrastructure financing in the country over the long period he added.

Apart from IL&FS, IIFCL and Srei has also got the registration from Sebi to start IDF.  ICICI is also starting an NBFC IDF.

 Sebi is considering six more applications to start IDFs he was informed he said.

To encourage foreign investors we should act together according to FM.

"Foreign investors are interested to invest in such funds in India. But if they must invest in India, we must get our act together. Approvals must be granted quickly, projects must be completed on time without cost over runs" he said.

He also asked banks to support IDFs.

When an IDF steps in, the bank must be willing to release the loan. Banks must recognise that sooner their money is released, they will be able to lend to more projects. The role of IDF is different, they provide long term finance he said.

Meanwhile Hamon Investment Group from Hongkong has invested  $ 100 million in this IDF. The IDF is targeting $ 1 billon of investment.