Having raised more than Rs 7,000 crore through its recent bonds offering, India Infrastructure

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Finance Company (IIFCL), is hoping to soon mobilise an additional $1.8 billion (nearly Rs 9,000 crore) from various multilateral institutions to fund the country’s infrastructure projects.

The resources will be mobilised over the next few months from the World Bank, Asian Development Bank and Germany’s government-owned development bank KfW.

The largest chunk of the credit lines from the multilateral agencies would come from the World Bank, chairman and managing director, IIFCL, S S Kohli, told Financial Chronicle. “We expect to get $1.2 billion (around Rs 6,000 crore) from the World Bank in the next two months,” Kohli said.

Recently, the World Bank agreed to provide $3 billion in long-term loans for the infrastructure sector in India over the next three years. Apart from IIFCL, the other beneficiaries of the loan would be the Small Industries Development Bank of India and Power Grid.

Kohli said that the Asian Development Bank is expected to disburse an additional $347 million by the end of September 2009 out of the total of $500 million sanctioned by it to IIFCL. The disbursement during the year is expected in two tranches. “We have already availed of $153 million out of the sanctioned limit. The rest is expected to come partly in April/May this year and partly in September,” Kohli said.

He said a deal of [USE EURO SIGN] 200 million ($260 million) is being worked out with KfW to finance private-public partnerships in infrastructure.

In its brief operations of less than three years, IIFCL has emerged as the principle vehicle of the government to boost the economy by directing spending into infrastructure. The benefits of the investments are expected to percolate to other sectors such as cement and steel and help block the slowdown in the economy.

Towards this, the government as part of its two stimulus packages has allowed IIFCL to raise tax free bonds of Rs 10,000 crore this fiscal year ending March 31, 2009, and another Rs 30,000 crore in the next fiscal year.

The first tax-free bonds offering by IIFCL after the packages were announced has been oversubscribed about three time. As against the target of raising Rs 2,500 crore with a green-shoe option, IIFCL has raised Rs 7,369.3 crore.

The five-year bonds offered a coupon of 6.85 per cent and was also thrown open to retail investors with a minimum ticket size of Rs 1 crore. “Some highnet worth individuals have invested in the bonds offering,” Kohlis said. The issue opened on January 19 and closed on January 22.

The massive resource-raising exercise by IIFCL is expected to fund projects of Rs 75,000 crore at competitive rates over the next 18 months mainly in the highways, ports and airports sectors. IIFCL resources used for refinance can leverage bank financing of double the amount.

It has been estimated by the government that the infrastructure sector would requires $500 billion investment in the next five years.