ICICI Bank, BoB, Citi and LIC set up $2 billion infra debt fund

The government today announced the launch of a $2-billion infrastructure debt fund, jointly promoted by private lenders ICICI Bank and Citi Bank, state-owned lender Bank of Baroda and insurance major LIC.

ICICI Bank (together with a wholly-owned subsidiary), Bank of Baroda, Citi and LIC will hold 31 per cent, 30 per cent, 29 per cent and 10 per cent, respectively, of the equity shares in the debt fund.

ICICI Bank managing director Chanda Kochar, Citi Bank CEO Pramit Jhaveri, Bank of Baroda CMD M D Mallaya and LIC MD Sushobhan Sarkar signed the memorandum of understanding (MoU) for the country's first infrastructure debt fund structured as a non-banking finance company (IDF-NBFC) today.

The IDF would seek to raise debt capital from domestic as well as foreign resources and would invest in infrastructure projects under the public-private partnership model that have completed one year of operation.

Over the years, the IDF will expand and diversify domestic and international sources of debt funding to meet the large financing needs of the infrastructure sector, thereby giving an impetus to the creation of the infrastructure necessary to drive the country's economic growth.

Speaking at the launch, finance minister Pranab Mukherjee said the setting up of the IDF through public private partnership would meet the long-term needs of infrastructure sector funding in the country.