New Delhi, India, June 2, 2023—To develop a robust pipeline of investment-ready public-private partnership (PPP) projects in infrastructure across India, IFC and National Bank for Financing Infrastructure and Development (NaBFID) signed a memorandum of understanding (MoU) today. The collaboration aims to support the nation's target of achieving a $5-trillion economy while fostering low-carbon and climate-resilient growth.
Under the MoU, IFC and NaBFID will collaborate to jointly identify and develop PPP projects. In addition, comprehensive transaction advisory services will be available for those initiatives. The projects will be selected and implemented with an eye on sustainability as well as climate adaptation and mitigation, supporting India's climate commitments.
The initial projects are expected to mobilize around $2 billion in private investment over the next few years in national priority sectors, including renewable energy, energy storage, urban infrastructure, and others. While providing models for replication and scaling up, projects developed through this partnership will be critical to mobilizing private funding to meet India's massive infrastructure investment needs—around $1.4 trillion, including $290 billion through the private sector, as estimated by the National Infrastructure Pipeline (NIP).
"NaBFID and IFC's collaboration to offer Transaction Advisory Services, with a focus on PPP projects, supports the government's NIP initiative," said Vivek Joshi, Secretary, Financial Services, Government of India. "The government has taken several measures to facilitate the development of PPP projects, including project implementation support and viability gap funding to project implementing agencies, among others. We welcome all stakeholder support to bolster India's economy, which requires a strong growth in the infrastructure sector."
Further, NaBFID and IFC will work with state governments and project implementation agencies while collaborating with the Department of Economic Affairs to identify and screen PPP projects requiring transaction advisory support. The aim is to improve people's access to energy, transport, and sanitation, among others, by attracting commercial financing on competitive terms, leveraging government financial support, and securing financing and risk products, where needed, from multilateral agencies.
"We welcome this opportunity to partner with NaBFID and deepen our collaboration with the Government of India and state governments, while supporting the development of sustainable, bankable, and replicable PPP projects to accelerate private capital mobilization," said Emmanuel B. Nyirinkindi, Vice President, Cross-Cutting Solutions, IFC. "This collaboration will help us deliver new infrastructure across India's critical sectors, boosting economic growth and supporting the government's national climate action agenda."
The MoU was signed by Rajkiran Rai G, Managing Director, NaBFID and Thomas Lubeck, Manager, Asia Pacific Public-Private Partnership, Transaction Advisory Services, IFC, in the presence of Vivek Joshi, Secretary, Bhushan Kumar Sinha, Joint Secretary from the Department of Financial Services, Ministry of Finance, and Baldeo Purushartha, Joint Secretary, Infrastructure Finance, Department of Economic Affairs; Emmanuel B. Nyirinkindi, Vice President, Cross-Cutting Solutions, IFC; Shalabh Tandon, Acting Regional Director and Head of Operations and Climate Change, South Asia, IFC; Wendy Werner, India Country Head, IFC, and B.S. Venkatesha, Deputy Managing Director, NaBFID.
"To ensure successful implementation of NIP and boost India's infrastructure sector, we need to bridge both the finance and non-finance gaps. One way to bridge the non-finance gaps is by offering Transaction Advisory Services, which promote investment of public and private capital for development purposes while assisting clients in structuring and procuring viable projects, particularly PPP projects," said Rajkiran Rai G, Managing Director, NaBFID.
As an advisor, IFC will help the government conduct detailed project studies, assess structuring options that best meet public needs and are viable for investors, and assist the government in running open and competitive tenders to identify qualified private partners and encourage innovation in delivery. IFC's advisory support is completed once project agreements are signed between the public and private partners.
IFC has a 30-year track record of advising on PPPs across sectors in more than 100 countries, resulting in mobilization of $40 billion private investment over 164 projects and benefitting over 153 million people through better access to electricity, water, sanitation, and health care.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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About NaBFID
National Bank for Financing Infrastructure and Development (NaBFID) is an infrastructure focussed Development Financial Institution (DFI) established by an Act of Parliament to support the development of long-term non-recourse infrastructure financing in India, including development of the bonds and derivatives markets necessary for infrastructure financing and to carry on the business of financing infrastructure. Government of India has set up NaBFID as the fifth All India Financial Institution (AIFI) in the country and NaBFID has both developmental and financial objectives. NaBFID has already been operationalised on December 29, 2022, with its first disbursement. For more information, visit www.nabfid.org.
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