IIFCL's finance SPV fails to make a start
A year after its incorporation, India Infrastructure Finance Company (IIFCL) - a government-owned SPV for financing infrastructure projects - remains a non-starter.
By Radhika Bhalla & Priti Patnaik, TNN |
NEW DELHI: A year after its incorporation, India Infrastructure Finance Company (IIFCL) ��� a government-owned SPV for financing infrastructure projects ��� remains a non-starter.
While the SPV was established to provide long-term debt to finance infrastructure projects involving long gestation periods, the company has disbursed a paltry Rs 70 crore during the year. Disbursals have been low despite the fact that the company has sovereign guarantee of up to Rs 10,000 crore for raising long-term debt to fund big-ticket core projects.
According to government officials, part of the reason for IIFCL proving unsuccessful in performing its key function was the fact that different agencies were involved in its formulation and implementation. While the policy for setting up SPV to fund infrastructure projects was formulated by the department of economic affairs under the finance ministry, the banking division implemented it.
As a result, key policy aspects in its functioning were overlooked, a source said. ���While SPV was established to provide long term debt to infrastructure projects, especially projects undertaken on a public-private-partnership (PPP) basis, IIFCL has so-far only sanctioned short term loans,��� the source said.
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