India Infrastructure Finance Company (UK) Limited

1.1  India Infrastructure Finance Company (UK) Limited is mandated to (i) extend long term loans in foreign currency to infrastructure projects in India for their import of capital equipment & machinery, and (ii) raise funds from the Reserve Bank of India, out of foreign exchange reserves. The RBI has consented to subscribe in US dollar denominated bonds to be issued by IIFC (UK), up-to an amount of USD 5 billion. IIFC (UK) bonds are fully guaranteed by the Government of India. Lending operations of the Company are governed under the GoI Scheme for Infrastructure Financing through IIFCL (SIFTI).

2. Sectors covered

2.1  The sectors broadly covered for financing under SIFTI include [i] Road and bridges, railways, seaports, airports, inland waterways and other transportation projects; [ii] Power; [iii] Urban transport, water supply, sewage, solid waste management and other physical infrastructure in urban areas; [iv] Gas pipelines; [v] Infrastructure projects in Special Economic Zones; and [vi] International convention centers and other tourism infrastructure projects.

2.2  The lending by IIFC (UK) Limited is exclusively meant for financing import of capital equipment and machinery by the infrastructure projects in India and is subject to compliance of ECB guidelines. In order to avoid monetization effect of the transactions, the disbursement of loan by IIFC (UK) is directly made, outside India, to the overseas supplier(s) of the capital equipment.

3. Eligibility criteria
  
3.1  For a project to be eligible for funding under SIFTI, the project should be implemented (developed, financed and operated for the project term) by (i) a Public Sector Company, or (ii) a Private Sector Company selected under a PPP initiative, or (iii) a Private Sector Company. The projects awarded under PPP route are accorded priority for lending.

3.2  IIFC (UK) Limited lends to projects set up by private companies subject to the conditions that (i) the service to be provided by the project is regulated or the project is being set up under an MOU arrangement with the Central Government, any State Government or a PSU, (ii) the tenor of IIFC (UK) lending is larger than that of the longest tenor commercial debt by at least two years, (iii) lending to private sector companies shall remain within the limit of 20 percent of the total lending by IIFC (UK) in any accounting year.

3.3  Projects, implemented through a project company set up on a non-recourse basis, are only eligible for financing.

4. Ceiling on sanction of loan

4.1  Loan from IIFC (UK) to the projects eligible under SIFTI is, inter alia, subject to the following ceilings (combined exposure of IIFC-UK and IIFCL).  The maximum amount of loan that can be considered by IIFC (UK) is the lowest of a) to c).

(a)   Loan amount not to exceed 20 percent of the project cost,
(b)   Loan amount not to exceed 80 percent of the Lead Bank’s loan amount,
(c)   Loan amount by IIFC (UK) not to exceed the cost of the capital import.

Loans from IIFC (UK) Limited are subject to usual project-wise/group-wise exposure norms linked to Capital Funds.      

5. Tenor

5.1  IIFC (UK) provides long term loan to the projects, where average maturity for repayment of the debt provided to the project company exceeds 8.5 years.

6. Appraisal & Monitoring

6.1  The disbursement of loans by IIFC (UK) is subject to the appraisal done by reputed appraising institutions, the Lead Bank accepting and adopting the same.  IIFC (UK) coordinates with the Lead Bank for regular monitoring and periodic evaluation of compliance of the project with agreed milestones and performance levels.

7. Disbursement of loans by IIFC (UK) Limited

7.1  The disbursement of the loan is made to the standard supplier(s) of the equipment directly as per Letter of Credit, based on the confirmation from the lead/designated bank on receipt of satisfactory reports from the project and fulfilment of other prescribed requirements. In case, there is/are any other bank(s) participating in the facility and an escrow account for disbursement of loans is maintained by one of such banks outside India for the project, the disbursement of IIFC (UK) Limited is considered for routing through such account for onward payment to the supplier(s).

8.    Highlights of IIFC (UK)’s operations

8.1  The Company commenced its operations effectively from September 2008. In a short span, IIFC (UK) has created a niche for itself by soliciting proposals for aggregate loan amount of around USD 8 billion and approved aggregate assistance of USD 2.454 billion by the end of March 2011. The total cost of these projects is over USD 31 billion. During the year 2010-11, the Company achieved a growth of 159% in terms of approval of loans and 728% in terms of disbursement of loans (including Letters of Comfort issued by IIFC-UK) over the previous year. The projects assisted by the Company, along-with other banks and financial institutions shall facilitate additional capacity generation of 23770 MW power, 111 kilometres of Metro Rail, 15 MTPA of port cargo handling and 23 kilometres of on-shore gas pipeline. Major highlights of the Company’s performance are presented below:

9.    Board of Directors of IIFC (UK) Limited

Mr. S K Goel, Chairman
CMD, India Infrastructure Finance Company (UK) Limited
8th Floor, Hindustan Times House,
18-20, Kasturba Gandhi Marg,
New Delhi-110001, INDIA

Mr. N S Srinath, GoI nominee Director
Executive Director, Bank of Baroda
Baroda Corporate Centre,
C-26, G-Block, BK Complex
Mumbai- 400 051, INDIA

Prof. Gerard George, Non-Executive Director

Professor of Innovation and Entrepreneurship,
Director, Rajiv Gandhi Centre,
Business School, Imperial College,
South Kensington Campus,
London SW7 2AZ

Dr. N K Madan, Managing Director
India Infrastructure Finance Company (UK) Limited
87 Gresham Street,
London EC2V 7NQ

For Business enquires please contact:

Dr. N K Madan,
Managing Director,
India Infrastructure Finance Company (UK) Limited
(A wholly owned subsidiary of IIFCL, which is GoI enterprise)
87 Gresham Street, London EC2V 07NQ UK
Tel: +44(0) 2076006564, +44(0)2077768955
Fax: +44(0)2077768958
Email: nkmadan@iifc.org.uk  
Website: iifc.org.uk