Home >Politics >Policy >Cabinet allows 5,300 crore capital infusion in IIFCL via recap bonds in 2019-20

The Union Cabinet on Wednesday approved additional infusion of 5,300 crore into state owned Infrastructure Finance Company Ltd (IIFCL) via recapitalization bonds in 2019-20 to boost its lending capabilities. In the next financial year, 10,000 crore will be infused.

“This will be done through regular budgetary support and / or through issuance of recapitalization bonds. The timing, terms and conditions will be decided by the department of economic affairs," a government statement said.

The Cabinet also approved for increasing the authorized capital of IIFCL from 6,000 crore to 25,000 crore. “This will enable IIFCL to create requisite headroom for borrowing, thus enabling it to finance big ticket infrastructure projects in line with government of India's target to invest 100 lakh crore in infrastructure sector over the next five years," the statement said.

IIFCL was set up in 2006 for providing long-term finance to viable infrastructure projects across various sectors.

The development comes a slowdown in the economy and the fund infusions is crucial as participation by IIFCL in funding infrastructure project opens up possibilities of co-financing by other lenders including larger banks.

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