He said this on the occasion of ICICI Bank-led India Infradebt Fund signing a Rs 50-crore tripartite loan pact for a road project promoted by Jaypee group. (Agencies)
"Infrastructure Debt Funds (IDFs) should try to mobilize resources from insurance and pension sectors as these funds are available for long term horizon," he said.
Later, ICICI Bank Managing Director and CEO Chanda Kochhar told reporters that the agreement paves the way for many more such road projects to have access to funding.
The pact was signed between the IDF, the NHAI (National Highways Authority of India) and the project company which in this case is the Himalayan Expressway Ltd (HEL).
HEL, a subsidiary of Jaypee group, is undertaking the construction of Zirakpur-Parwanoo Highway connecting Punjab, Haryana & Himachal Pradesh on Build Operate and Tranfer basis. The total length of the highway would be 28.690 kilometres.
Four financial institutions, led by ICICI Bank, had in February last year launched a Infrastructure Debt Fund (IDF) -- India Infradebt Ltd. This fund can finance projects of up to USD 2 billion (about Rs 10,000 crore).
The other sponsors of the India Infradebt Ltd are Bank of Baroda (BoB), Citi and LIC. The ICICI group has 31 percent, BOB - 30 percent, Citi - 29 percent and LIC - 10 percent.
Kochhar said there are almost 100 road projects in the country that are ready and would require about Rs 50,000 crore of bank funding. This agreement can pave the way for all such projects to access this kind of funding, she added.
The government had in 2011-12 fiscal allowed to form IDF to step up investment in the infrastructure sector, which requires USD 1 trillion in the 12th Plan.
Of the total proposed investment, about 50 percent is expected to come from the private sector and the debt contribution is expected around USD 350 billion.
He said this on the occasion of ICICI Bank-led India Infradebt Fund signing a Rs 50-crore tripartite loan pact for a road project promoted by Jaypee group.