IIFCL, WB, ADB to come up with credit enhancement model

State-run India Infrastructure Finance Company Ltd (IIFCL), World Bank, Asian development Bank (ADB) and the government will come out with a final model of credit enhancement scheme by the end of March.

“We are working to formalise a proper credit enhancement scheme model — with World Bank, ADB and government — by the end of March. The scheme will surely boost the domestic credit market,” said S K Goel, Chairman and Managing Director of IIFCL. Meanwhile, the company will shortlist the infrastructure loans, which should be taken over, from banks through takeout financing by March.

“We have sanctioned take out financing for seven projects worth above Rs 1,500 crore. We have got a number of proposals from various banks to include many projects under this. However, IIFCL will shortlist the proposals on the basis of eligible and non-eligible projects by March,” he added.

Through takeout financing IIFCL plans to takeover loans given by banks to infra-structure firms, in order to help banks in recovering their funds ahead of the payment period. Earlier in October, the company had signed agreements with banks like Punjab National Bank (PNB), UCO Bank, Allahabad Bank and Central Bank for this.

IIFCL has come out with a tax-free infra structure bond in order to raise an amount of up to Rs 1,200 crore. The issue, which was opened on February 4 would close on March 4. Majority of the IIFCl’s sanctioned projects are in power sector with 51 per cent of the toal allotted money going to the area, while 39 per cent goes to road development.