New Delhi (06.01.2023): The state-owned lender IIFCL has been playing a critical role and is involved in 670 projects, 28% of public-private partnership projects in India, worth ₹12 trillion. Building world-class infrastructure is the next big challenge for India’s take-off and IIFCL would continue to work in meeting the financing needs of the capital-intensive sector India Infrastructure Finance Company Ltd (IIFCL) Managing Director P.R. Jaishankar said on Thursday.
Speaking at National Summit on “Infrastructure Development Finance- The Road Ahead” Jaishankar stressed the need for ‘a dedicated law on infrastructure to protect all stakeholders’ from private concessionaires to the public authorities in terms of ensuring quality, ensuring appropriate pricing for the end users and future investors as projects and financing requirements are long term as projects are meant for generations.
The National Conclave was organized by IIFC at India Habitat Centre (IHC) on January 05 to mark the 18th foundation day of IIFCL that witnessed hundreds of guests and panelists from across sectors including banking, infrastructure, institutional investors, rating and research, etc. Union Secretary (Financial Services) Vivek Joshi marked the inaugural session as the guest of honor. The inaugural session followed two successive panel discussions (Theme I: Innovative Solutions For Financing Infrastructure; Theme II: Energizing Public Partnerships in Infrastructure).
While stressing the need for a robust law on infrastructure development Jaishankar added further that many developed nations have such laws and perhaps it’s time that India also thinks about that as this will help make infra projects more bankable. Further, he added that the majority of the infrastructure investments today are from the government side and that it has to be aptly supplemented by the private sector.
IIFCL MD Jaishankar also said that since 2015, there has been a slew of reforms, including revisiting the model concession agreement, adequate land acquisition and faster clearances leading to a reinvigoration of the infrastructure sector and all reforms put together have started giving India’s infrastructure sector dividends.
“IIFCL aims to transform its image from that of a last-mile lender to a preferred financier. We attempt to make a mark in the country not only as a financier for infrastructure projects but also in policy advocacy and aid and support the government in bringing about reform in regulatory environment necessary for scaling up and expanding infrastructure sector in new areas", he added.
Underlining the long-term investment ecosystem and investors’ concerns panelist Tarun Bansal (Head of Business & Relationship Management, India Ratings & Research, Fitch) said that investors do not want any surprises as they prefer security, sustainability, and stability. Steering the discussion IIFCL Deputy MD Pawan K Kumar (IRS IT) responded that IIFCL holds projects right from their birth to their completion and eternity thus bringing with it trust, assurance, and sustainability.
On the side-lines, in QA session, Vineet Nahata, Director of Power Gilt Treasuries Inc drew the attention of the panelists speaking on “Innovative Solutions For Financing Infrastructure”. Vineet Nahta said the Exempted Provident Fund Trusts have been permitted to invest upto 5% of their incremental surplus in INVITs, however, the lack of awareness about the product and its salient features and how INVITs are beneficial in maximizing the RoI of the fund and its risk-return trade-off is not understood by the fund managers/Trustees who make investment decisions. Hence most PF Trusts shy away from exploring this investment option. A literacy drive to create awareness is required from the Finance and Labour Ministry. Also, the investors who are already holding INVITs find great difficulty in drawing refinance by pledging the INVITs to NBFCs and Banks. These issues were acknowledged by panelists as pertinent and worthwhile to act upon for the benefit of all.
It may again be underlined that IIFCL is involved in 670 projects, 28% of PPP projects in India, worth ₹12 trillion. IIFCL offers long-term finance to projects across several sectors including roads, highways, ports, power, water supply, gas pipelines, and education under different modes including re-financing to banks and public financial institutions.
