New Delhi: State-owned India Infrastructure Finance Co. Ltd (IIFCL) will raise up to $1 billion (around Rs4,600 crore) when it needs the money through medium-term notes (MTN).
An MTN typically matures in five to 10 years and is offered by a firm to investors through dealers.
The firm’s board and the government have authorized the MTN programme, but the firm has no immediate plan to raise the money, an IIFCL official said.
IIFCL’s board has approved another proposal to raise as much as Rs1,000 crore in taxable bonds, the official said. The approvals come even as IIFCL has not received any proposal for a Rs10,000 crore refinance window it made available to banks last year.
The window would refinance 60% of a bank’s loans. The firm has sanctioned Rs20,888 crore to about 95 infrastructure projects till October valued at Rs1.68 trillion. These include 63 road, 23 power and six port projects.
Company officials have complained that the lender’s ability to catalyse investments were hobbled by restrictions on how much it could lend directly to projects and on the rate of interest in its refinance window. IIFCL can only lend up to one-fifth of a project’s cost.
Finance minister Pranab Mukherjee had announced in the Union budget for 2009-10 a scheme that would allow IIFCL to take over a portion of bank loans for infrastructure projects, thus freeing resources for more lending.
Mint had reported in August that IIFCL had commissioned ratings and advisory firm Crisil Ltd to suggest a plan for the take-out financing scheme.
PTI contributed to this story.