The Union Cabinet on 3 November 2005 approved the
formation of India Infrastructure Finance Co Ltd -- a special purpose vehicle to
finance mega infrastructure projects.
The SPV will be incorporated under the Companies
Act, 1956, and will be a 100 per cent government-owned entity. The Union
government will provide guarantee of up to Rs.10,000 crore to IIFCL in 2005-06
for borrowing long-term funds from domestic and overseas markets. The borrowing
limit guarantee will be fixed at the beginning of each fiscal year. IIFCL can
also borrow funds from multilateral agencies like World Bank and Asian
Development Bank.
The SPV will finance viable projects in core
sectors like roadways, railways, shipping infrastructure and airports.
Also See:
CCEA defers
infrastructure SPV proposal (28-Oct-05)