ADB to provide $240 mn loan for infra financing

NEW DELHI: India will get a $240 million soft loan from the Asian Development Bank ( ADB) for development of infrastructure projects in different states through public-private partnership (PPP).

The central government, ADB and the India Infrastructure Finance Company Ltd ( IIFCL) today signed a $240 million loan agreement in this regard, an official statement said.

The fund will be used to expand road networks in Andhra Pradesh, Bihar, Gujarat, Maharashtra, Jammu and Kashmir.

The loan to road projects will help connect far flung communities to markets, the statement said, adding a power project in Gujarat will also receive funding.

"The long-term financing...will play a catalytic role in encouraging private-sector participation in infrastructure projects, particularly, through the PPP modality and will leverage funds over 10 times from the private sector," Joint Secretary (Finance Ministry) Venu Rajamony said.

This is the third and final tranche of the ongoing second India Infrastructure Project Financing Facility(IIPFF), which aims to stimulate infrastructure development through PPP investments.

"The loan would flow to the IIFCL on back-to-back basis with sovereign guarantee," the statement said.

In 2009, ADB had agreed to provide a $700 million multi-tranche financing facility to help IIFCL provide long-term funding for infrastructure development.