International Finance Corporation (IFC), the private lending arm of the World Bank Group, today launched a $2.5-billion rupee denominated bonds in the Indian market to fund infrastructure projects in India.
IFC raised $1 billion in offshore global rupee-linked bond last year, to fund infrastructure projects that attracted a broad range of international investors.
Under the current programme, IFC will use a combination of rupee-denominated bonds and swaps to raise local-currency financing of up to $2.5 billion (or Rs15,000 crore) over the next five years. Proceeds from the bond sale will be used for infrastructure investments in India.
''Vibrant capital markets provide critical access to finance for the private sector,'' said IFC executive vice president and CEO Jin-Yong Cai. ''Bonds offered under IFC's rupee financing programme offer a safe investment alternative for domestic pension funds and other investors, while mobilising capital to address India's infrastructure needs.''
IFC is banking on deep, liquid capital markets to ensure access to long-term, local-currency finance for the private sector, which, it said, is the key engine of job creation in emerging markets.
''The onshore bond programme marks another important milestone in the engagement between India and IFC. Issuance of onshore bonds by IFC in the Indian bond market, with offer of longer tenor bonds, will deepen the bond market and also provide much needed finance to infrastructure projects,'' said India's finance secretary Arvind Mayaram.
IFC's $1 billion offshore global bond programme, which was linked to the rupee exchange rate, offered six separate issuances between November 2013 and April 2014 - four with maturities of three years, one of five years, and the final tranche of seven years.
In FY14, IFC said, it invested $1.2 billion in India to achieve strategic priorities of providing counter-cyclical support to infrastructure, promoting financial inclusion and enhancing access to quality and affordable healthcare to the under-served.