India Infrastructure Financing Initiative launched

Infrastructure Development Finance Company Limited ("IDFC"), Citigroup Inc. ("Citi"), India Infrastructure Finance Company Limited ("IIFCL") and Blackstone Group Holdings L.P. (together with its affiliates, "Blackstone") announced the launch of "The India Infrastructure Financing Initiative", a collaborative effort to deploy approximately US $ 5 billion in capital for infrastructure projects in India. The plan is to deploy about US$ 2 billion in equity capital and US$ 3 billion in long term debt financing with maturities exceeding ten years.

The equity financing program will be managed by IDFC and will invest in greenfield, brownfield and operating projects primarily in roads, power, airports, ports, and industrial and commercial infrastructure. IDFC, Citi and Blackstone will together invest US$ 250 million. The balance is expected to come from reputable international investors as well as selected domestic institutional investors including IIFCL. The debt financing will be channeled through IIFCL in several tranches over the next three years for projects appraised by IDFC and also certain banks/financial intermediaries. The agreement was signed by Dr. Rajiv B. Lall from IDFC, Mr. Sanjay Nayar from Citi, Mr. S.S. Kohli from IIFCL, and Mr. Robert L. Friedman from Blackstone, here today.

Shri P. Chidambaram, the Finance Minister of the Government of India, in whose presence the signing ceremony was conducted, said that "This initiative is an important milestone in our search for innovative solutions to meet the vast challenge of financing the development of India’s burgeoning infrastructure sector". Shri Deepak Parekh, Chairman IDFC, added that "This initiative sets a new benchmark for collaboration between a domestic partner such as IDFC with deep domain knowledge in infrastructure, foreign financial institutions with wide reach into global financial markets and the Government of India to solve India’s infrastructure financing problems".

Reiterating Citi's commitment to India, Mr. Charles Prince, Chairman and CEO of Citi had, in this context, stated earlier that Citi was excited about this opportunity to make an impact on the development of infrastructure projects, which are critical to the country's growth prospects and to be a partner in this important initiative, which was born out of a request from the Government of India at the Indo-U.S CEO forum held in December 2006. Mr. Stephen A. Schwarzman of Blackstone had stated that India being an important part of Blackstone’s global strategy, this initiative would give them an opportunity to make a meaningful contribution to India’s infrastructure development. Finance Secretary, Shri Ashok Jha and the Secretary, Financial Sector, Shri Vinod Rai were also present on the occasion.

Source : Press Information Bureau

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