IFC in India

Photo: Manas Ranjan Ojha/IFC
Photo: IFC archives
IFC Factsheet - 10April15_aw.indd 1-3
Promoting Water Security
Ensuring Food Security
India is experiencing increasing water stress with
ramifications on crop productivity, food security, drinking
water access, ecological security, rural livelihoods and
industrial growth. There is a need to address the challenges
of availability, access, efficiency, and pollution of water to
sustain the economic growth trajectory. IFC is engaging
with private sector companies to catalyze water stewardship
initiatives at the sub-basin level that focus on promotion of
good practices and technologies for agricultural water use
efficiency, community water empowerment for decentralized
governance at the village and micro watershed levels, and
public-private-community dialogue for multi-stakeholder
alignment. The program aims to achieve water savings of 100
million cubic meters by 2018. IFC has worked on a number
of interventions targeting both industrial and agricultural
water use efficiency. IFC developed an integrated water
sustainability framework for four Tata Group companies
to help them track their water footprint and implement
efficiency measures. So far, this initiative has led to water
savings of 3.96 million cubic meters by the four companies
on the basis of the partnership recommendations with
planned measures for further water savings in the pipeline.
Food security is a strategic priority for IFC in South Asia. High
storage losses, inadequate inventory systems and procurement
bottlenecks due to lack of world-class grain storage facilities
result in wastage and non-availability of grains, especially
for the poor in India. The Indian state of Punjab tackled this
problem through private sector participation in developing
scientific wheat storage facilities or silos. IFC advised Punjab
government on public-private-partnership basis to develop
state-of-the-art, long term storage grain silos to store 50,000
tons of wheat for below poverty line families. The new silos
ensure that annually 500,000 of India’s poorest will receive
better nutrition through these improved storage facilities.
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Dairying is a major source of income for a large population
of rural India, especially small farmers. In 2013, IFC
provided a $15 million loan to dairy company Parag Milk
Foods for expanding its milk processing facilities. IFC’s
investment and expertise will enable Parag to expand
supply chain linkages across over 50,000 farmers and food
suppliers, adopt best practices to increase milk yields, and
improve food safety standards.
IFC in India
Promoting Sustainable
Private Sector-led Growth
Cover Photo: Dilip Banerjee/IFC
4/24/2015 3:40:47 PM
Some of IFC’s major initiatives in India are:
models in planning and implementing rooftop solar options
that have been adopted by emerging economies globally.
From a South Asia regional integration perspective,
hydropower sector is a key focus area that will play a key
role in enhancing cooperation between the economies of
Bangladesh, Bhutan, India, and Nepal.
IFC in India: Promoting Sustainable
Private Sector-led Growth
The most acute needs for energy, water, roads, phone connections, healthcare, education, sanitation, waste
management, and access to financial services are among those who live in low-income, rural and semi-urban, fragile,
and conflict affected parts of South Asia. Most people in these parts have been deprived of the benefits of growth
while many are vulnerable to climate change impacts.
With over 1.2 billion people and the world’s third largest economy in purchasing power parity terms, India strives to
address the challenge of making its growth model and pace sustainable and inclusive.
Strategic Approach
In India, IFC is sharpening its focus on increasing access
to energy, finance and healthcare; providing sustainable
infrastructure; and boosting regional linkages.
To grow opportunities for the underserved, IFC in India
focuses on building infrastructure; facilitating renewable
energy generation; promoting cleaner production,
energy and water efficiency; supporting agriculture for
improved food security; creating growth opportunities
for small businesses; helping reform investment climate;
developing public-private partnerships; encouraging lowcost housing; and making affordable healthcare efficient
and accessible.
IFC Factsheet - 10April15_aw.indd 4-6
Photo: Dilip Banerjee/IFC
Deep and efficient local capital markets are the foundation for a thriving private
sector, the key driver of jobs and growth. In October 2013, IFC announced a $1
billion offshore rupee-linked bond program to strengthen India’s capital markets and
attract foreign investment. An overwhelming response from global investors enabled
IFC to successfully mobilize $1 billion and set the benchmark for different tenors
with bond maturities of upto seven years. Following the success of the first global
offshore rupee-linked bond program, IFC launched a $2 billion offshore rupee-linked
bond program in November 2014. The first issuance under this program named
Masala Bond consisted of $163 million of offshore rupee bonds with maturities of
10 years. These were also the first such longest dated bonds listed on the London
Stock Exchange. To further deepen India’s capital markets and support infrastructure
development, IFC also launched a $2.5 billion onshore rupee bond program in 2014.
Named Maharaja Bonds, these were issued in maturities ranging from five to 20
years. For the first time onshore bonds with maturities of upto 10 years were issued
at a yield below the Government of India yield and were fully subscribed by offshore
investors. Over the next five years, IFC will use a combination of rupee-denominated
bonds and swaps to raise local-currency financing. Proceeds from onshore bond
programs will be used for financing infrastructure projects in India..
At a Glance
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in 346 companies in India,
Enabling Financial Inclusion
Financial services tailored to the needs of underserved is a powerful instrument
for reducing poverty, enabling them to build assets, increase incomes, and reduce
vulnerability to economic stress. From microfinance institutions to housing finance
companies, women entrepreneurs, and other stakeholders, IFC is helping expand
access to finance to households and businesses. In 2010, IFC made an equity
investment of $4.5 million in Aadhar Housing Finance Private Limited, a joint
venture of investee client Dewan Housing Finance Corporation and IFC. The
financing has enabled Aadhar to provide over 13,000 home loans to underserved
low-income households. IFC has been playing a key role in strengthening the
microfinance sector in India through timely and crucial investments along with
comprehensive advisory interventions. Utkarsh Microfinance and Bandhan
Financial are two examples of IFC’s support to microfinance institutions that
are playing an important role in helping achieve the goal of financial inclusion.
Starting with an investment of $300,000 in 2010, IFC has so far invested nearly $5
million in Utkarsh till date. IFC also provides advisory services to Utkarsh, helping
it diversify products and develop robust internal systems. IFC’s investments and
advice to Bandhan has helped promote a more balanced growth of microfinance
in India, especially in eastern, central and northern India. IFC is also supporting
Bandhan in its transformation into a bank with the microfinance institution having
received a banking license from the Reserve Bank of India. IFC has provided a
$150 million financing package to YES Bank to expand access to finance to small
and medium enterprises. To promote women entrepreneurs, the facility partly
focuses on women-owned small businesses in India’s priority states. In South Asia,
this is IFC’s first credit line with a gender component.
providing over $10.3 billion
IFC is using a combination of investments and advisory
services to support private sector development in India
with an emphasis on making growth more inclusive and
balanced.
According to various estimates, almost 90 percent of India’s off-grid population
lives in rural areas where people rely on kerosene. IFC’s Lighting Asia/India
program aims to promote safe, affordable, and modern off-grid lighting among
two million people in rural India. IFC has also made critical investments
in the power and renewable energy sectors. In 2012, IFC mobilized loan of
$270 million for state-owned transmission utility Power Grid Corporation
of India Limited to partly finance its investment program. Of the total loan,
IFC committed $100 million. The financing has helped India in having a fully
integrated national grid capable of handling 44,250 MW of inter-regional
capacity, and improve access to electricity for over 12 million people across
India. In another significant initiative, IFC helped the Government of Gujarat in
structuring a first-of-its-kind pilot grid-connected solar rooftop power project
as a public-private partnership. With IFC’s support, two pilot rooftop projects
of 2.5 mega watt each in Gandhinagar, capital of state of Gujarat, have been
successfully implemented. IFC has launched a white paper that describes business
While private sector accounts for over two-thirds of
healthcare service delivery in India, access to quality
healthcare at affordable prices remains a concern among
low income households. Under the Private Participation for
Health in India (PPHI) Program, IFC and World Bank are
leveraging the private sector to increase and improve access
by low-income communities to affordable and quality health
services, while reducing the burden of high out of pocket
health care spending. Our focus is to reach under-served
markets, including non-metros, towns and smaller cities in
low-income states with an emphasis on Uttar Pradesh. The
Supporting Creation of Jobs
Private sector provides nine out of 10 jobs in developing
countries, playing a key role in creating opportunities and
fostering growth. Back in 2003, IFC provided a loan of
$75 million to Powerlinks Transmission Limited, a joint
venture between Tata Power and Power Grid Corporation,
for supplying power to electricity-deficient parts of North
India. An IFC study found that the project has created about
75,000 new formal jobs in India between 2006 and 2012. In
2007, IFC provided a loan of $50 million to OCL India, an
Odisha-based cement manufacturer, to help finance capacity
expansion and set up a new plant. A study conducted in
2012 revealed that in addition to creating 300 direct jobs, the
project also created over 7,000 new indirect jobs over a period
of four years. In FY13, IFC committed another $40 million
loan to OCL for financing a cement grinding plant in the state
of West Bengal.
in financing for its own
account and $2.9 billion in
mobilization from external
resources.
•
As of June 30, 2014, IFC’s
committed portfolio in India
stood at nearly $4.7 billion,
making India IFC’s largest
portfolio exposure. Of the
total portfolio, nearly onethird each is contributed by
the three business clusters
of Financial Institutions
Group, Infrastructure and
Natural Resources, and
Manufacturing, Agribusiness
& Services.
•
In FY14, IFC committed
nearly $1.2 billion across 34
Boosting Access to Energy
Through strategic interventions, IFC aims to bring
economic opportunities to underserved communities
where needs are greatest, particularly in the priority
states of India; help address climate change impacts;
and encourage global and regional integration including
promoting trade and investments within and from South
Asia.
Since 1956, IFC has invested
Expanding Access to Affordable
Healthcare
program aims to provide 22 million people with better access
to quality healthcare by 2018.
projects in India.
•
IFC also has a strong
advisory program in India
with a total portfolio value
of $62 million across 74
projects. In FY14, three
quarters of IFC’s advisory
program had a footprint in
India’s priority states.
Photo: Shailesh Andrade/IFC
Photo: Pallon Daruwala/Gujarat Pipavav
Strengthening Capital Markets
4/24/2015 3:40:53 PM