The Japan International Cooperation Agency (JICA) on Friday (11 March) signed an agreement with India Infrastructure Finance Company Limited (IIFCL) to provide 50 billion Japanese Yen (Rs 2,866 crore) as an Official Development Assistance (ODA) loan towards developing Public-Private Partnership (PPL) infrastructure projects.
The terms of ODA loans are very concessional, i.e. the repayment period is 14 years after a grace period of 6 years, and the rate of interest is floating rate of the London interbank offered rate for six month deposits in Japanese Yen.
The agreement, signed between Takema Sakamoto, Chief Representative of JICA India and Sanjeev Ghai, Chief General Manager of IIFCL, will promote infrastructure development mainly in the field of non-fossil power projects by providing long term finance to private/public enterprises and the banks/public financial institutions to on-lend for investment in viable infrastructure projects.
Speaking on the occasion, Sakamoto said, “India is well positioned to leapfrog technology in infrastructure projects and JICA’s assistance will facilitate mobilization of funds for high quality infrastructure development.”
JICA has an accumulated ODA loan commitment of Rs 2.3 lakh crore for development of transportation, energy, water and sanitation, agriculture and forestry, and education sectors in India.
The loan to IIFCL is one of the outcomes of efforts targeting to raise 3.5 trillion Yen for public and private investment and financing from Japan, including ODA, to India within five years. This target was announced by Prime Minister Shinzo Abe at his summit meeting with Prime Minister Narendra Modi in September 2014.
