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| MFF-Facility Concept | MFF - Second India Infrastructure Project Financing Facility (IIPFF II) | |||
| Country | India | |||
| MFF-Facility Concept Number | OO37 | |||
| Project Number | 41036- 01 | |||
| Fund Source/Amount[Proposed] |
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| Thematic Classification |
Economic growth
Private Sector Development Capacity Development |
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| Project Rationale | Infrastructure is a critical determinant of productivity-inclusive of development, national integration, and poverty reduction. Insufficient capacity across infrastructure sectors leads to a widening infrastructure gap, resulting in lower productivity, higher transport and logistics costs, reduced competitiveness, and slower growth.
Acknowledging the importance of infrastructure development in the context of economic growth, the overall strategy of the Government of India (GoI) has been to significantly enhance the role of the private sector in infrastructure development and revolves around (i) revising policies and regulations across sectors for enhancing private sector participation (PSP) in infrastructure development, (ii) strengthening capacity of state governments for promoting public-private partnership (PPP) arrangements for infrastructure development, and (iii) enabling arrangements for bridging the enormous deficit in infrastructure financing especially for long-term funds through all possible sources since available sources of supplemental equity and long-term debt that can match the long gestation and payback periods of most infrastructure projects are very limited. In the context of financing infrastructure projects through the PPP modality, the limited supply of long-term resources, and the need to mobilize available resources, IIFCL was established in early 2007 with the mandate to be a nodal financing agency as an integral element of the overall PPP development strategy of the Government. The proposed Facility involving a loan of $700million is a second MFF to IIFCL which will continue to support the Government's infrastructure development agenda. |
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| Impact | The proposed Facility will result in an improvement in the overall availability and reliability of physical infrastructure in line with the targets of the 11th Five Year Plan. A synergistic approach is envisaged based on close coordination with other development partners and market players. | |||
| Geographical Location | India | |||
| Summary of Environmental and Social Issues | ||||
| Social Aspects | IIFCL has adopted the ESSF and improved in-house capacity to implement the ESSF with ADB's support. Additional improvement measures are underway with the support of the ongoing piggy-backed TA7030-IND. In addition, IIFCL will continue to ensure that all subproject proposals to be financed under the Facility comply with the requirements of the ESSF. IIFCL will appoint qualified specialists in areas of environment and social safeguards to strengthen in-house capacity. The ESSF is uploaded in IIFCL's website (http://www.iifcl.org/whatsnew_details.php?wid=18). The ESSF will be reviewed and updated after ADB Board approval of the proposed Safeguard Policy Statement (SPS) R-Paper this year and to reflect ADB's experience in implementing the ESSF under the IIPFF I. | |||
| Environmental Aspects | Same as above. | |||
| Stakeholder Participation and Consultation | ||||
| During Project Design | ADB's extensive support for the financial sector and infrastructure is in the context of sustained policy dialogue at various levels of the government. Substantive assessment underpinned the mainstreaming of PPPs through ongoing TAs, among others, for developing a pipeline of bankable projects to establish effective demand for infrastructure financing. ADB extended support to develop IIFCL's business strategy in consultation with the development partners and also enabled IIFCL to undertake international rating. ADB also led the effort to establish a common environmental and social safeguards framework (ESSF) of IIFCL which has since been endorsed by other development partners. Policy dialogue also facilitated the adoption of international best practices in IIFCL with regard to financial management and review mechanisms. | |||
| Procurement | ||||
| Consulting Services | Consultants will be recruited in line with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time). | |||
| Civil Works/Goods | All procurement to be financed under an ADB loan will be carried out in accordance with ADB's Procurement Guidelines (2007, as amended from time to time) and will also comply with the operations manual adopted by the Board of IIFCL on 14 November 2008. | |||
| Responsible ADB Officer |
Cheolsu Kim |
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| Responsible ADB Department |
South Asia Department |
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| Responsible ADB Division |
Financial Sector, Public Management and Trade Division, SARD |
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| Executing Agencies |
India Infrastructure Finance Company Limited |
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| Timetable | ||||
| Concept Clearance | 11 May 2009 | |||
| Fact-finding | 18 May 2009 to 29 May 2009 | |||
| Appraisal | 20 Jul 2009 to 24 Jul 2009 | |||
| Board Approval | 17 Nov 2009 | |||
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