Washington-based International Finance Corporation (IFC) is in talks with Tata Power for facilitating long-term debt arrangement, along with other major ultra-major power projects. Besides, in the banking sector, it is looking at picking up equity stake and upper Tier-II instruments. Speaking at an international factoring conference in Mumbai, Iyad Malas, director, South Asia said that the World Bank arm is looking at long-term funding opportunities in the range of $200-300 million in ultra-mega power projects and is already in talk with Tata Power.
It is also looking at other infrastructure projects, especially in the road sector since it has the advantage of providing long-term funding. IFC already has a big-ticket exposure of over $100 million in Tata Steel and Cairn Energy. It has recently invested $150 million in ICICI Bank’s upper Tier-II bonds and $100 million in HDFC Bank’s similar issue. In future, it is open to more such investments in banks which will help it meet its capital requirements.
Mr Malas, however, said that the funding major it did not have any plans to raise any debt from Indian markets though it has an RBI approval for raising $1-billion equivalent of rupee funds. Indian markets, he said, had earned IFC good returns and it has already invested close to $300 million in the first half of its business year June to July 2007. It expects to invest another $300 million in the rest of the year. Exposure to India is the fourth-largest after Russia, Brazil and Turkey. Earlier, making a presentation on factoring, Mr Malas said that world wide factoring — a trade finance product — is offered in about 70 countries ever since it was introduced 40 years ago and its worldwide turnover was over trillion. IFC hikes trade support by $500m IFC has approved a $500 million increase in its Global Trade Finance Programme, bringing the programme ceiling to $1 billion under the Global Trade Finance Programme.
IFC issues guarantees on the payment risk of local financial institutions. In most cases, the underlying transaction is a documentary credit. However, a growing component of the trade support has been directed to pre-export financing. In addition to trade finance, the programme includes technical assistance to local financial institutions that need either training to upgrade their technical skills or assistance in capacity building. This technical assistance helps local banks provide better trade solutions for their customers, which are mainly small and medium enterprises.
It is also looking at other infrastructure projects, especially in the road sector since it has the advantage of providing long-term funding. IFC already has a big-ticket exposure of over $100 million in Tata Steel and Cairn Energy. It has recently invested $150 million in ICICI Bank’s upper Tier-II bonds and $100 million in HDFC Bank’s similar issue. In future, it is open to more such investments in banks which will help it meet its capital requirements.
Mr Malas, however, said that the funding major it did not have any plans to raise any debt from Indian markets though it has an RBI approval for raising $1-billion equivalent of rupee funds. Indian markets, he said, had earned IFC good returns and it has already invested close to $300 million in the first half of its business year June to July 2007. It expects to invest another $300 million in the rest of the year. Exposure to India is the fourth-largest after Russia, Brazil and Turkey. Earlier, making a presentation on factoring, Mr Malas said that world wide factoring — a trade finance product — is offered in about 70 countries ever since it was introduced 40 years ago and its worldwide turnover was over trillion. IFC hikes trade support by $500m IFC has approved a $500 million increase in its Global Trade Finance Programme, bringing the programme ceiling to $1 billion under the Global Trade Finance Programme.
IFC issues guarantees on the payment risk of local financial institutions. In most cases, the underlying transaction is a documentary credit. However, a growing component of the trade support has been directed to pre-export financing. In addition to trade finance, the programme includes technical assistance to local financial institutions that need either training to upgrade their technical skills or assistance in capacity building. This technical assistance helps local banks provide better trade solutions for their customers, which are mainly small and medium enterprises.
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