World Bank to lend additional $3 bn to India
The World Bank has agreed to help India with $3 billion of increased investment
as the global financial crisis undermines private financing for the country's
much-needed infrastructure agenda, the bank announced Thursday.
“Part of the additional financing include a line of credit to
the India Infrastructure Finance Company Limited (IIFCL) to help finance
private-public partnerships in infrastructure; funding for the Small Industries
Development Bank of India (SIDBI) to provide credit to small and medium
enterprises, and assistance to PowerGrid to expand its transmission network,”
the World Bank said in a written statement.
The development institution
has provisioned this additional amount as part of the total financing envelope
of $14 billion proposed in the India Country Strategy over
2009-2011.
India had requested an additional $5.6 billion over the next
two years. Having provisioned the $3 billion, the World Bank said it would need
to examine the balance $2.6 billion and work with the Indian government over the
coming weeks to clarify details.
The strategy, which is geared to help
India propel infrastructure development, support the country's seven poorest
states, and respond to the financial crisis, was discussed by the World Bank
board last week in Washington DC.
“Other areas which could receive
support from additional financing include the National Housing Bank and the
recapitalisation of state banks, the details of which are yet to be discussed
with the government of India,” the statement said.
The statement said
that India was the largest borrower from the World Bank's International
Development Association (IDA) and second largest borrower from its International
Bank for Reconstruction and Development (IBRD) in fiscal 2008.
The World
Bank's $15.1 billion-portfolio in the country covers 61 active investment
projects.In the current financial year, the World Bank's oard approved
$2.7 billion in funding for nine new projects for India spanning a range of
sectors including infrastructure, education, health and rural development. Of
this, $1.3 billion came from IBRD and $1.4 billion came as interest-free credits
from IDA.
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