Original disclosure @ ADB website
Updated in EWS Jun 25, 2020
Disclosed by Bank Oct 25, 2018
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According to the bank website, "the facility was designed to have two tranches. ADB approved tranche 1 amounting to $400 million in October 2013 which supported 17 subprojects. Tranche 2 amounting to $300 million was approved in October 2015. However, following ADB approval, the government increased tranche 2's guarantee fee to 1.20% instead of the 0.25% of tranche 1. With this higher guarantee fee, tranche 2 became at least 0.25% more expensive than the funding India Infrastructure Finance Company Limited (IIFCL) could have raised from the domestic bond market; consequently, the loan was not signed, and ADB cancelled tranche 2 in 2016. The government, however, agreed to return the guarantee fee to 0.25% and submitted a periodic financing request letter on 6 September 2018. Because tranche 2 has expired, this tranche is designated as tranche 3.
The facility supports the Government of India in promoting infrastructure growth through increased private sector investment in public private partnerships (PPPs). When the facility was approved in 2013, India aimed to mobilize about $500 billion in private funding to meet its $1 trillion infrastructure financing requirements under its Twelfth Five Year Plan, 2012- 2017. Mobilizing infrastructure financing remains a priority under the (i) Three-Year Action Agenda, 2017 -2018 to 2019- 2020 and (ii) Economic Survey, 2017- 2018 which estimates an infrastructure investment gap of $526 billion through 2040. The facility is an integral part of the Asian Development Bank strategy for infrastructure finance in India and complements parallel initiatives in PPPs and capital markets , all of which contribute to creating an enabling environment for long-term financing for infrastructure development."
Responsible ADB Officer Lambert, Donald J.
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies India Infrastructure Finance Company Limited
10th Floor, Jeewan Prakash Building
25 Kasturba Gandhi Marg
New Delhi, India 110001
ACCOUNTABILITY MECHANISM OF ADB
The Accountability Mechanism is an independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an Asian Development Bank-financed project. If you submit a complaint to the Accountability Mechanism, they may investigate to assess whether the Asian Development Bank is following its own policies and procedures for preventing harm to people or the environment. You can learn more about the Accountability Mechanism and how to file a complaint at: http://www.adb.org/site/accountability-mechanism/main