Accelerating Infrastructure Investment Facility in India - Tranche 3 (ADB-47083-004)

Regions
  • South Asia
Geographic location where the impacts of the investment may be experienced.
Countries
  • India
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Asian Development Bank (ADB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Completed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Oct 23, 2018
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
India Infrastructure Finance Company Limited
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
  • Infrastructure
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Advisory Services, Grant, Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 300.50 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Loan Amount (USD)
$ 300.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Grant Amount (USD)
$ 0.50 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ ADB website

Updated in EWS May 23, 2024

Disclosed by Bank Oct 25, 2018


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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

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."

 

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

The ADB categorized the project risks as 'FI', adding that 'All subprojects that are category B or C will be allowed.'

Investment Description
Here you can find a list of individual development financial institutions that finance the project.
Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

As stated on the company's website, IIFCL is a wholly-owned Government of India company set up in 2006 to provide long-term financial assistance to viable infrastructure projects through the Scheme for Financing Viable Infrastructure Projects through a Special Purpose Vehicle called India Infrastructure Finance Company Ltd (IIFCL), broadly referred to as SIFTI.

The authorized and paid up capital of the company stood at INR 10,000 Crore and INR 9,999.92 Crore, respectively as on 31st March 2024. IIFCL has been registered as a NBFC-ND-IFC with the Reserve Bank of India (RBI) since September 2013 and follows the applicable prudential norms of the RBI.

As a long-term lending institution, IIFCL is amongst the most diversified public sector infrastructure lender in terms of eligible infrastructure sub-sectors and product offerings. It has the mandate to finance both green-field and brown-field projects, covering Direct Lending, Takeout Finance, Refinance and Credit Enhancement, across all infrastructure sub-sectors as notified by the Government in the Harmonised Master List of Infrastructure Subsectors These broadly include transportation, energy, water, sanitation, communication, social and commercial infrastructure.


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

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

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How it works