The Indian government is planning to set up a SPV to meet the gap in credit market to finance infrastructure, and London is the most favoured destinations, says Indian Finance secretary Subba Rao at the Commonwealth Business Council-CII organised India Infrastructure Investment Forum
“We are planning to set up a SPV outside the country to raise outside resources,” he says. “It will be set up on London so government and the private sector will be involved. We plan to use forex resource for financing infrastructure and we are looking into co-financing with other institutions.”
The secretary is visiting the UK with a delegation for annual economic and financial dialogue with the UK government. They discussed financial inclusion, climate change, sub-prime in the US and its impact on India and India’s policy incentives on Public-Private-Partnerships yesterday with the HM Treasury.
Today, opening the discussion on Infrastructure Finance, CBC Director General Mohan Kaul highlighted how India’s infrastructure needs have shot up from $300 billion two years ago to $495 billion today.
“It is very interesting times for Indian Infrastructure Finance. International finance companies are excited about it and want to be part of it. But, at times, there are some frustrations in terms of delays and clarity,” Kaul says.
Speaking on PPPs, Dr Rao says, “We are outlaying various incentives both financial and non-financial for the private sector. On the financial side we are setting up two venture capitals. We are also developing the corporate bond market in India.”
The venture capital fund has heavy hitters like Blackstone Group, IIFCL, IDFC on board.
On the non-financial side, he says, “We are introducing a shelf of PPP projects. We are also setting up PPP cells in central ministries and state projects.”
Highlighting the Indo-UK partnership and links, Kaul says that UK has led successful PPP projects and is in the process of still learning.