IIFCL Infra Debt Fund to float green sector scheme

Targets Rs 1,000-cr corpus; placement period likely to open by end of first quarter of FY16

IIFCL Infra Debt Fund plans to float a “green sector” scheme to raise Rs 1,000 crore for funding environmentally sustainable infrastructure projects like renewable energy, water and waste treatment.

The proposed fund is a 10-year close-ended infrastructure debt fund scheme with investments in the green sector for private/public placement of units of Rs 10 lakh each. The India Infrastructure Finance Corporation, a  state-owned finance company, will be its the strategic investor and the scheme will be managed by IIFCL Asset Management Company Limited (IAMCL).

Banking sources said placement period (seeking contributions for scheme) is likely to open by the end of the first quarter of 2015-16. The closing would depend on the response. The scheme will operate with a minimum mobilisation of Rs 300 crore. Further, it will have a minimum of five investors and no single investor will account for more than 50 per cent of the total corpus.  

The discussions are on with other life  and general insurance companies, pension funds, banks and financial institutions on investments, say banking sources. The aim is long-term capital appreciation through exposure to debt securities of green sector companies.

The portfolio of debt will comprise 70 per cent investments in infrastructure projects with a minimum BBB rating. The balance will be in under-construction projects or projects at advanced stages of construction, backed by experienced and financially stable sponsors who will finance cost overruns.

IAMCL is also in the market to raise upto Rs 1,500 crore for investing money into range of infrastructure projects. It has already raised Rs 300 crore through its very first scheme.

The investments from this scheme initiated since August 2014 across seven Infrastructure Companies/ Projects are in Investment Grade ratings.