To fund India's infrastructural projects, the Manila-based Asian Development Bank (ADB) will give $ 700 million to the India Infrastructure Finance Company IIFCL) in the next one-and-a-half years. Of the $700 billion, $400 billion would be given to IIFCL by early 2014 and the remaining by early 2015.
The bank said that India needs to invest more in infrastructure — $1 trillion in 12th Five Year Plan (2012-13 to 2016-17). The private sector would be called upon to bridge the shortfall to the tune of $ 100 billion over the Plan period, ADB said.
According to the ADB officials, the funding would be for two purposes — directly lending to developers and take-out financing — replacing financing by banks with IIFCL funding which would free up bank loans for green field projects and other investments.
Most part of the money would go towards direct financing by IIFCL. A small proportion (10-15 per cent) would be for take-out financing