Home » LIC, IL&FS propose $2 bn infra fund

LIC, IL&FS propose $2 bn infra fund

LIC, IL&FS propose $2 bn infra fund

Life Insurance Corporation of India (LIC) plans to hold 10 per cent stake in the proposed $2 billion infrastructure debt fund (IDF) that it would set up in coordination with IL&FS. The remaining stake would be held by IL&FS and the fund would be launched in October. The fund would finance primarily projects in power, transport, and energy sectors. Government and the Reserve Bank of India (RBI) cleared the setting up of the fund and it is expected that SEBI would approve it by June to set up an asset management company for the fund.

The debt fund will raise long-term money from investors to lend to infrastructure projects that have long gestation period. Besides IL&FS, financial institutions like IDFC and ICICI Bank also plans to raise infrastructure debt and equity funds.
RBI allowed banks, non-banking finance companies and mutual funds to set up infrastructure debt fund in September 2011. The Union Budget for 2011-12 had announced setting up of IDFs in order to accelerate and enhance fund flow into infrastructure projects.

Leave a Reply