Govt sets up $2-bn infra fund with ICICI Bank, Citi
The government on Monday announced the launch of a $2 billion (Rs 10,000 crore) infrastructure debt fund (IDF) in partnership with private lenders ICICI Bank and the Citigroup aimed at providing long-term funds to the cash-starved sector.india Updated: Mar 05, 2012 22:05 IST
The government on Monday announced the launch of a $2 billion (Rs 10,000 crore) infrastructure debt fund (IDF) in partnership with private lenders ICICI Bank and the Citigroup aimed at providing long-term funds to the cash-starved sector.
India will require an estimated $2 trillion (Rs 100,000 crore) over the next five years to fund infrastructure projects such as roads, ports and airports.
"This fund to my knowledge is definitely the first fund of this kind in India, and probably one of the first of its kind in the world as well," ICICI Bank managing director Chanda Kochhar said after signing of the memorandum of understanding (MoU) here at the finance ministry office at North Block.
Finance minister Pranab Mukherjee said that setting up of the fund through public private partnership (PPP) would meet the long-term need of infrastructure sector funding.
The fund is structured as a non-banking finance company.
The MoU was signed by Kochar, Pramit Jhaveri, CEO, Citi India, MD Mallaya, chairman and managing director Bank of Baroda and Sushobhan Sarkar, managing director, LIC.
"We expect to attract capital from both local and international debt investors," said Jhaveri.
The framework for establishment of IDFs was announced by the finance ministry in lasy June through which IDFs were allowed to be set up either structured as a NBFC or as a mutual fund. RBI issued the regulations for IDFs to be set up as a NBFC in November, 2011 and SEBI issued the regulations governing an IDF structured as a mutual fund in August, 2011.
ICICI Bank, BoB, Citi and LIC will hold 31%, 30%, 29% and 10% shares respectively in the firm.