Int’l Finance Corpn will support infrastructure projects in UP

IFC Global Managing Director Makhtar Diop met Chief Minister Yogi Adityanath and held preliminary discussions on the issue at a high-level meeting chaired by Adityanath at his official residence on Saturday.

“Yes, IFC will create a PMU and identify projects that can be implemented under the PPP model. These include solar PV projects, solarization of tube wells and future expressways that can be built on PPP model,” Principal Secretary Manoj Kumar Singh said after Diop’s meeting with the Prime Minister.

The expressways that can be included in the PPP model include the connecting expressway that the state government proposes to build to connect the Agra-Bundelkhand link of the Lucknow-Agra expressway with the Ganga expressway.

IFC, a member of the World Bank Group, signed a Memorandum of Understanding with the Department of Infrastructure and Industrial Development (IIDD) in July 2023 to support the state government’s efforts to promote PPP and provide advisory services for procurement, operation and maintenance of e-commerce bus systems .

IFC has been engaged as transaction advisor for the Jhansi Solar Project to assist the client (TUSCO) in the preparation and tendering of a 600 MW solar power park project in Jhansi. The project is expected to reduce CO2 emissions by at least 1.1 million tonnes per year, enable $330 million in financing, reduce the energy gap and increase renewable energy production. IFC has contributed to a number of projects aimed at promoting investment in agtech (agricultural technology) in Uttar Pradesh.

This IFC India Agritech Advisory Project (IAAP) benefits over 30,000 farmers.

IFC has invested in sewage treatment plant (STP) projects to revitalize river Ganga under PPP in collaboration with Jal Nigam of Uttar Pradesh and the National Mission for a Clean Ganga.

The project, launched in 2017, engages the private sector in the construction, financing, operation and maintenance of sewage treatment plants (STPs) in Mathura and Varanasi.

An official spokesperson said Diop expressed great interest in supporting the IFC for Uttar Pradesh’s ambition to become a trillion-dollar economy and collaborate in the areas of agricultural infrastructure and technology (AgriTech). Diop said IFC has been collaborating on many important projects in the country for several years.

“IFC has committed $200 million to IndiGrid, India’s first and largest power sector infrastructure investment fund, supporting the modernization of the Indian transmission sector through asset monetization. At the same time, IFC is actively engaged in advising on PPP transactions for innovative renewable energy projects.”

IFC and the World Bank Group are working with the state government to increase infrastructure investment in the state’s urban areas. There are at least seven cities in Uttar Pradesh (Kanpur, Lucknow, Ghaziabad, Agra, Varanasi, Meerut and Prayagraj) with a population of more than 1 million that can become an important part of this initiative.

Together, IFC and the World Bank Group can help establish a common financing structure for the state to attract private capital to urban infrastructure. A combined commercial financing structure could leverage UP’s financial strength to meet the demands of collective urban infrastructure financing.

He said that with the support of the WBG 100 Cities program, including IFC, the state-owned intermediary could raise loans/bonds on a combined basis with government guarantee or credit enhancement. The WBG-ADB 100 cities program, implemented jointly with the Ministry of Housing and Urban Affairs (MoHUA), aims to implement bankable projects in water supply, sanitation and solid waste management services in 100 cities. The program is in the preparatory phase. Since 2007, IFC has invested nearly $750 million in 29 projects in sectors including chemicals and fertilizers, construction, renewable energy, telecommunications, health and food processing.

The IFC delegation included IFC Country Director for India and Maldives Wendy Werner; Regional Director for South Asia Imad Fakhoury; Global Director of Disruptive Technologies Farid Fezoa; Regional Industry Director for Infrastructure, Asia Pacific, Vikram Kumar; Regional Industry Director for Financial Institutions, Alain Forlemu; Manufacturing, Agribusiness and Services Advisor, South Asia, Ramesh Ramanathan; and advisor to managing director Taeho Kang.

Earlier, the IFC delegation also held detailed talks with Principal Secretary Manoj Kumar Singh to identify possible avenues for cooperation. They also visited the Prime Minister’s Command Centre, where Secretary to the Prime Minister Amit Singh made a detailed presentation on the CM’s desk.