IL&FS to arrange $1.2 bn for Malaysian project

Infrastructure Leasing and Financial Services is arranging $1.2 billion for a Malaysian free trade zone project called the Tanjong Agas Supply and Marines Services near Kuala Lumpur . IL&FS will be involved in project development as well.

The finance company, which recently set up an office in Dubai, would be arranging the loan from various international banks in West Asia, Europe and the Asia-Pacific region. IL&FS Financial Services, the investment arm, syndicates a number of infrastructure projects in India and sees a $5-bn loan syndication opportunity this year.

Their interest does not end with arranging the loan. "There is a lot of infrastructure development involved in the project and we will also look at getting directly involved in the project," said Ramesh C Bawa, managing director of IL&FS Financial Services.

 

The project, which has a total cost of around eight billion ringgit (Rs 12,000 crore), will develop facilities for upstream and downstream activities for the oil and gas industry, maritime development and logistics. Apart from structures which support upstream and downstream infrastructure for refining, liquefied natural gas and petroleum terminals, the zone will also have shipyards, liquid-bulk terminal and dockyards.

IL&FS is also in talks with Indian companies for investment and participation in the project. "We are in talks with the project developers for engineering, procurement and construction projects for IL&FS Engineering, which can execute some of the infrastructure projects," Bawa said, refusing to provide details on the nature of the work they’d sought for the project.

IL&FS Engineering or the erstwhile Maytas Infrastructure was taken over by the joint venture between IL&FS and the Saudi BinLadin Group as a co-promoter. It had shifted focus to engineering, procurement and construction, and has been looking at diversfying across regions.

Tanjong Agas Supply and Marines Services has already seen initial investment from the the government in the form of equity and also roped in as many as seven companies which have agreed to set up shop in the zone. The zone will span 4,260 acres in the town of Pekan, and the project would take three years of construction, to be done in three phases.

The Malaysian government holds 30 per cent stake in the project through the Pahang State Development Corporation. Private entities hold 30 per cent. The rest of the 40 per cent stake will be held by management partners who set up shop in the free trade zone.