Japan International Cooperation Agency (JICA) today inked a pact with IIFCL to provide 50 billion Japanese yen (about Rs 2,866 crore) assistance for implementation of infrastructure projects in PPP.

“JICA today signed an agreement with India Infrastructure Finance Company Limited (IIFCL) to provide 50 billion Japanese yen Official Development Assistance (ODA) loan as the principal for the implementation of Public-Private Partnership (PPP) Infrastructure Financing Project,” JICA said in a statement.

The ODA loan conditions are concessional, i.e; the repayment period is fourteen years after a grace period of six years, and the rate of interest is floating rate of the London interbank offered rate for six month deposits in Japanese yen, it said.

The pact was signed between Takema Sakamoto, chief representative of JICA India and Sanjeev Ghai, Chief General Manager of IIFCL.

“The assistance will promote PPP-based infrastructure development mainly in the field of non-fossil power projects by providing long term finance to private/public enterprises and the banks/public financial institutions to lend to private/public enterprises for investment to viable infrastructure projects,” it said.

Sakamoto said, “India is well positioned to leapfrog technology in infrastructure projects and JICA’s assistance will facilitate mobilisation of funds for high quality infrastructure development.”

Productivity in Japan is attributable to the ready availability of infrastructure, and improved infrastructure in India will lead to increase per capita productivity and to improve quality of life as well, he said.

JICA has accumulated ODA loan commitment of Japanes Yen 4 trillion in total, which is equivalent to about Rs 2.3 lakh crore, for development of transportation, energy, water and sanitation, agriculture and forestry and education sectors in India.

“The loan to IIFCL is one of the outcomes of efforts targeting to realize 3.5 trillion yen of public and private investment and financing from Japan, including ODA, to India within five years, announced by Prime Minister Shinzo Abe at the Summit Meeting with Prime Minister Narendra Modi on September 1, 2014,” the statement said.

The government of India has envisaged an investment of USD 1 trillion in infrastructure under the 12th Five-Year Plan from 2012 to 2017 in order to achieve economic growth of 8.4 per cent per annum in the period.

Forty-seven per cent of the envisaged investment is earmarked for financing by the private sector.