New Delhi: India Infrastructure Finance Company Ltd (IIFCL) today said it plans to float USD 1 billion (about Rs 5,000 crore) infrastructure debt fund (IDF) by the end of February next year.
"We are coming out with an USD 1 billion IDF. The proposed IDF is approved by government and our board," IIFCL Chairman and Managing Director S K Goel told reporters here.
"We have decided to go for mutual fund route which is more flexible," he said, adding, "We are planning to launch it by the end of February".
The proposed fund would have five sponsors, with IIFCL being the lead player with 26 percent stake. IDBI Bank and LIC will have 14 percent and 10 percent stake, respectively.
Foreign partner Asian Development Bank and HSBC is expected to have 25 percent each as talks are in progress.
He said the company is looking for other foreign partner.
The country's poor infrastructure, which is seen as a major bottleneck for economic growth, requires an estimated investment of a whopping USD 1 trillion in the 12th Plan, beginning 2012 and ending 2017. Of this, it expects 50 percent to come from the private sector.
Talking about the recent changes on Takeout financing by the government, Goel said the modifications have been carried out to make the scheme more attractive to both infrastructure project developers and banks.
Transparent and a competitive pricing for Takeout Finance Scheme has been put in place. The pricing of takeout shall range from 0.25 percent to 1.5 percent over the benchmark rate of lending of IIFCL which is currently 9.65 percent depending upon the post commercial operation date (CoD) credit rating of the project, he said.
Takeout financing is a procedure under which loans made by banks to infrastructure firms are sold to other institutions so that banks recover their much-needed funds ahead of the payment schedule under the loan agreement. This is done to address the asset-liability mismatch.
Major concession in pricing has been announced for PPP projects and the current rate of takeout would range from 9.90 percent to 10.85 percent depending on the ratings of the project, he said.
As part of the modification, he said the government has allowed proposals for takeout can now be received from borrowers also, he said, adding, existing lenders would be incentivised by way of passing on the takeout fee to the extent of 0.3 percent of the takeout loan.
In case of road sector projects takeout can occur at any time after actual CoD, he added.