International BusinessIIFCL meets today to decide on Rs 10k cr unused fund
The board of India Infrastructure Finance Company Ltd (IIFCL) is meeting tomorrow to look at ways to create demand for the Rs 10,000 crore that it had raised earlier this year to refinance highways and port projects. The New Delhi-based financial institution has not received a single proposal for the fund.
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As part of the first stimulus package for the economy announced in December last year, the government had authorised IIFCL to raise funds through tax-free bonds to refinance highways and ports approved after January 31, 2009.
“The money is lying idle. I have not received any proposal until now,” said IIFCL Chairman S S Kohli.
The board will look at options of how this money can be deployed more efficiently. These include taking up projects approved before January 2009 or covering projects other than roads and ports. “This is one area where some flexibility is required,” added Kohli.
In his Budget speech earlier this month, Finance Minister Pranab Mukherjee had promised greater flexibility to IIFCL to fulfil its mandate of providing long-term funds to the infrastructure sector.
The government had also announced in the stimulus package that IIFCL would be allowed to raise more funds. That would be done only once the idle funds were exhausted, said Kohli.
IIFCL was set up a little over three years ago to provide long-term funds to the infrastructure sector. Kohli said he was satisfied with the funding that done by IIFCL so far. “IIFCL has played a prime role in funding infrastructure projects worth Rs 155,000 crore,” he said. This includes projects taken up by the company’s UK subsidiary.
The company has approved funding for 86 projects worth over Rs 18,400 crore, of which the bulk is for roads and power projects. Disbursement has started in 73 of these projects.
In the first three months of this year, Rs 800 crore has been disbursed. The target for the year is Rs 6,000 crore (as against Rs 3,200 crore disbursed last year), without refinances, he said.