IIFCL's UK arm targets $ 1 billion loan disbursement in FY'14

NEW DELHI: State-owned India Infrastructure Finance Company Ltd ( IIFCL) today said its London-based subsidiary IIFC(UK) is targetting fresh loan dibursement of $ 1 billion in 2013-14.

"Ministry of Finance, Government of India has recently approved the limit of 50 per cent for lending to projects set up by private companies (non PPP projects) from 20 per cent of lending in an accounting year for IIFC(UK)," IIFCL Chairman and Managing Director S K Goel said here.

This would enable a larger number of infrastructure projects to avail foreign currency financing from IIFC(UK) for import of capital goods, he said.

Besides, he said, the government has also allowed the subsidiary to launch a Takeout Finance Scheme on lines of IIFCL.

"IIFCL is expecting such a high amount of fresh loan disbursement on the back of above relaxation given by the Government," he said.

The company formed in 2008 was set up with the objective of lending in foreign currency to infrastructure companies for financing import of capital equipments. The company has disbursed loans of USD 975 million to various companies for import of goods since its inception.

Recently in October 2012, IIFC(UK) reduced its lending rates on foreign currency loans to infrastructure sector to around LIBOR+ 2 per cent from LIBOR+ 4.5 per cent to enable lowering of their financial debt service burden thereby increasing their viability.