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State-owned lender India Infrastructure Finance Company Ltd (IIFCL) is preparing to raise USD 200 million via external commercial borrowing (ECB) this month to bolster its infrastructure funding capabilities. Managing Director P R Jaishankar highlighted that this marks IIFCL's first ECB since its establishment in 2007, emphasising its strategy to diversify funding sources. The company aims to mobilise INR 8,000 crore by March 2025, with the current fiscal's total target at INR 29,000 crore. Collaborative funding with the Asian Development Bank and Korean Development Bank is also underway, reflecting IIFCL's commitment to infrastructure development.
India Infrastructure Finance Company Ltd (IIFCL), a state-owned infrastructure lender, is proceeding with its plan to secure approximately USD 200 million through external commercial borrowing (ECB) this month, confirmed Managing Director P R Jaishankar. He stated that the initiative aligns with IIFCL's efforts to support vital infrastructure projects and the government's focus on infrastructure growth. Advertisement
Jaishankar indicated that the borrowing would most likely be from the Japanese or US debt markets, with no changes to the plan. Speaking during IIFCL's 20th Foundation Day event, he noted this would be the company's first ECB since its inception in 2007, as previous funds were raised solely from multilateral institutions.
Speaking at the event, M Nagaraju, Secretary of the Department of Financial Services, had urged IIFCL, the National Bank for Financing Infrastructure and Development, and other banks to shift focus from secured assets to larger infrastructure projects. He also stressed the importance of pooling resources to finance such endeavours.
Jaishankar highlighted the institution's significant role in India's economic growth, noting its compounded annual growth rate of 20%. He pointed out that achieving a balance between debt and equity remains a challenge but is vital for supporting the nation's journey towards becoming a USD 5 trillion economy.
The USD 200 million borrowing forms part of the remaining INR 8,000 crore IIFCL intends to mobilise by March 2025, contributing to the total fiscal target of INR 29,000 crore. The company has already raised 75 per cent of this amount in the first three quarters and plans to complete the remaining 25 per cent in the final quarter.
Additionally, IIFCL has collaborated with the Asian Development Bank and Korean Development Bank to secure blended finance. As of March 2024, IIFCL's standalone loan book stood at INR 51,000 crore, with the consolidated figure at INR 60,000 crore. By March 2025, these numbers are projected to rise to INR 69,000-70,000 crore and INR 75,000 crore, respectively.
To date, IIFCL has sanctioned loans worth INR 2.8 trillion, with disbursements totalling INR 1.4 trillion, half of which has occurred in the last four to five years.
In addition to its core infrastructure business, IIFCL is diversifying into new sectors such as sustainable infrastructure, electric vehicle charging, and battery swapping projects. The company is also evaluating plans to list on stock exchanges, a move previously aimed for the 2024-25 fiscal year.
IIFCL's strategy to secure USD 200 million via ECB and its focus on large-scale infrastructure projects signal its pivotal role in driving India's development agenda. With a strong loan portfolio and diversified funding approach, the company is well-positioned to support the nation's infrastructure growth while pursuing innovative avenues like sustainable infrastructure and EV projects.
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