New Delhi: With the inauguration of IIFC(UK) Ltd by finance minister P Chidambaram, the off-shore subsidiary of India Infrastructure Finance Company Ltd (IIFCL), companies can now meet their capital expenditure solely outside India. Such lending may not result in any domestic absorption of liquidity.
The Finance Minister, observed that the Indian economy is abuzz with productive activities and has the potential of managing 8% plus growth over the next two decades. Development of infrastructure is key for sustaining high levels of growth.
Creation of IIFCL and IIFC (UK) will help facilitate availability of finances for the sector and promote exports from other countries.
S S Kohli, chairman and managing director, IIFCL said that the offshore arm will supplement the role of IIFCL in financing the country’s infrastructure. The company would be borrowing from the Reserve Bank of India foreign currency upto a maximum of $5 billion in several tranches. This will be used to provide foreign currency loans to meet import requirements of Indian companies that are developing infrastructure. The loan would be used to meet capital expenditure outside India.
Kohli stated that the setting up of IIFCL and its offshore subsidiary IIFC(UK) Ltd were the fulfilment of announcements made in the Union Budget 2005-06 and 2007-08.
IIFCL has sanctioned financial assistance to 78 infrastructure projects to the tune of $4.2 billion involving a project cost of around $30 billion. Of these projects, 63 have achieved financial closure.