ICICI led Infradebt signs pact to fund Jaypee road project

NEW DELHI: ICICI Bank-led India Infradebt Fund has signed a Rs 50-crore tripartite loan pact for a road project promoted by Jaypee group.

"The Infradebt company signed the first tripartite agreement. The agreement has been created in the road sector and paves the way for many more such road projects to have access funding through tripartite agreement. The funding would be to the tune of Rs 50 crore for this project," ICICI Bank managing director and CEO Chanda Kochhar told reporters on Friday.

The tripartite agreement was signed between the IDF, the NHAI ( National Highways Authority of India) and the project company which in this case is the Himalayan Expressway Ltd (HEL).

HEL, a subsidiary of Jaypee group, is undertaking the construction of Zirakpur-Parwanoo Highway connecting Punjab, Haryana & Himachal Pradesh on Build Operate and Tranfer basis. The total length of the highway would be 28.690 kilometres. Four financial institutions, led by ICICI Bank, had in February last year launched a Infrastructure Debt Fund (IDF) -- India Infradebt Ltd. This fund can finance projects of up to $ 2 billion. The other sponsors of the India Infradebt Ltd are Bank of Baroda (BoB), Citi and LIC. The ICICI group has 31%, BOB - 30%, Citi - 29% and LIC - 10%.

"It is a tripartite agreement which then gives all the rights that the lenders have, it gives those rights to the IDF as well and then the IDF actually provides some part of the funding to the project company," Kochhar said. She said there are almost 100 road projects in the country that are ready and would require about Rs 50,000 crore of bank funding. This agreement can pave the way for all such projects to access this kind of funding, she added. Kochhar said similar pacts can be made for other infrastructure sectors.