The Asian Development Bank (ADB) has approved $700m (£430m) of funding for investment in 31 road, railway, airport, urban infrastructure and energy projects throughout India.
The ADB said the loan programme was designed to assist the Indian government’s Infrastructure Finance Company Ltd (IIFCL), a state-owned fund that had a pipeline of 349 infrastructure projects at the end of March this year, with a total project cost of around $90bn (£55bn).
ADB said this pipeline was expected to grow by an average of 40 to 50 projects per year between 2014 and 2019.
The Indian government estimates that $1tr in infrastructure investment is needed to achieve economic growth of +8.4% under its current five-year development plan, and expects nearly half of that to be financed by the private sector.
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Cheolsu Kim, lead finance specialist in ADB’s South Asia department, said: “Poor infrastructure is one of the biggest drags on growth and development in India and there is a large investment funding gap of about $113bn during the 12th Five-Year Plan for 2012-2017.”
ADB’s latest tranche of loans approval comes after a previous $500 million loan facility which helped fund 30 public-private partnership projects in India, and further funding of $700m, approved in 2009, which is still being disbursed.