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The International Finance Corporation, the private sector financing arm of the World Bank Group, has signed an agreement to provide US$50mn in long-term debt financing to India’s Infrastructure Development Finance Company.

IFC is also an existing shareholder in IDFC with an equity stake of around 6%.

IDFC is a specialised financial intermediary with a mandate to provide financing to commercially viable infrastructure projects in India. In addition to funding activities, IDFC performs a policy advisory role by assisting India’s central and state governments in preparing road maps for reform initiatives and to develop the regulatory framework. The company’s asset growth has been significant during the past two years, partly reflecting improvements in the regulatory framework for infrastructure in India.

Iyad Malas, IFC director for South Asia, notes, “India’s infrastructure needs are massive and estimated at over US$150bn over the next decade. Given the limited public funding available for infrastructure, we believe that private sector involvement in this sector is extremely critical. We expect IDFC to play a key role in financing private infrastructure over the coming years.”

“As a long-term partner in IDFC, we are very keen to support its growth,” says Jyrki Koskelo, IFC director for global financial markets. “IFC’s loan will expand IDFC’s financing capacity, thereby promoting the implementation of private infrastructure projects. Moreover, in an emerging market country such as India, development of private infrastructure is central to IFC’s mission.”