German KfW extends Euro 54 mn loan to IL

Mumbai, May 22 (UNI) German bilateral KfW has extended a Euro 54 mn line of credit (LoC) facility to IL&FS, guaranteed by the Government of India, with a specific mandate to finance private sector infrastructure projects.

Announcing this, IL&FS said the KfW loan is a three-tier financing package for 40 years and market funds guaranteed by German Government for a tenor of 12 years and direct market funds for 15 years.

The subsidy in the long-term concessional tranche of 40 years renders the overall pricing on the LoC competitive, whilst the long tenor is optimal for financing infrastructure projects, an IL&FS release issued here said.

KfW has also agreed to provide a grant component of Euro 750,000 towards project development initiatives. The formal agreement for the loan has been signed today, paving the way for draw down of funds from the facility.

The KfW LoC is on a co-financing basis with the USD 100 mn LoC from Asian Development Bank (ADB) that had earlier been extended to IL&FS.

IL&FS would use the funds for projects in infrastructure segments, comprising roads, water supply and sanitation, airports, minor ports, power, urban mass transit systems, telecommunication (submarine optic fibre cable connection projects), information technology (cyber parks) and special economic zones. The choice of the sectors to be financed has been identified as part of ADB and KfW's support to State-level reforms, and is based on the projected infrastructure demand in each State.

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