India signs $850 mn-worth loan agreements with ADB

NEW DELHI - In a bid to boost infrastructure development and give an impetus to rural employment, India Tuesday signed agreements for $850 million-worth loans from the Asian Development Bank (ADB).

The first loan of $700 million is the second in a series of infrastructure loans by the ADB to India Infrastructure Finance Company Limited (IIFCL), said a statement from the finance ministry.

IIFCL, an infrastructure project financing facility, will use the money to provide funds to private players at commercial terms with over 20-year maturity, under the public private partnership (PPP) mode.

“The loan size is $700 million, to be released in three tranches, over a period of three years. The first tranche will be $210 million. IIFCL will be the executing agency,” said the statement.

The ADB had in 2007 approved a $500 million loan to IIFCL.

The multilateral finance institution also agreed to providing a $150 million loan for Khadi reform and development programme. The amount will be released in four tranches, over a period of three years and the first instalment will be of $30 million.

The ministry of Micro, Small and Medium Enterprises and Khadi and Village Industries Commission will be the implementing agencies.

“The reform agenda includes measures for dealing with the high cost of inputs, restructuring of production and cost chart, conversion of six sliver plants and four sales outlets in PPP mode, in addition to setting up a Marketing Organization,” said the statement.

A $2 million technical assistance amount will also be provided to support the implementation of the programme.