Investments Current Affairs

Credit Enhancement Fund: Government to launch Rs.500 crore fund

Union Government is going to launch Rs.500 crore Credit Enhancement Fund (CEF) in July 2018 to facilitate infrastructure investments by insurance and pension funds.

The CEF provides additional source of assaurance or gaurantee that borrower will service their loan. It also helps borrower to raise loans at lower interest rates. The  fund was first announced in Union Budget for fiscal year 2016-17.

Credit Enhancement Fund (CEF)

CEF will provide credit enhancement for infrastructure projects which will help in upgrading credit ratings of bonds issued by infrastructure companies and facilitate investment from investors like pension and insurance funds.

The initial corpus of the fund will be Rs 500 crore and will be sponsored by IIFCL (India Infrastructure Finance Company). It will operate as a non-banking finance company (NBFC). IIFCL will hold 22.5% stake in the NBFC, while Asian Infrastructure Investment Bank (AIIB) has been offered by the Government to pick up 10% stake.

Background

At present, only $110 billion is being invested in infrastructure in India, against requirement of $200 billion, leading many analysts to classify India as infrastructure deficit country. Most of the present infrastructure project financing is done by banking system. But all these lenders are saddled with problem of non-performing assets (NPAs). So there is need for the private sector to be more active on the infrastructure investment front. CEF will serve as alternative for rising of money for infrastructure projects through corporate bonds.

Tags:

Indian, French companies ink pacts worth 13 billion euros

Indian and French companies have exchanged 19 contracts and agreements worth over 13 billion euros in sectors including new and renewable energy, smart grid, nuclear energy, aviation, cement, telecom among others. The agreements were formalised at Indo-French Economic Partnership (IFEP) signing ceremony held in New Delhi in the context of French President Emmanuel Macron’s official state visit to India.

Key Facts

Aviation Sector: The biggest deals signed in terms of value were from civil aviation sector. Low-cost carrier SpiceJet signed $12.5-billion agreement with French aviation major Safran Group to supply 155 CFM LEAP-1B engines for airline’s Boeing 737 MAX aircraft, along with spare engines to support fleet.

Safran also announced its eighth facility in India at Hyderabad, Telangana with 250 employees, for production of harnesses used in civil and military aerospace applications, for both local and foreign programs.

Airports Authority of India (AAI) signed agreement with French engineering company Egis for conducting study of three airports in the country — Lucknow, Pune and Trichy.

Electric Mobility Sector: Four French companies — EdF International Networks, Citelum, G2M and Solstyce — signed an agreement to work together for developing charging infrastructure in India to support electric mobility.

Renewable energy sector: Bharat Light & Power and EDF renewed their contract pertaining to data acquisition to optimise wind and solar energy production.  General collaboration agreement was also signed between French Commission for Atomic and Alternative Energy (CEA) and Vikram Solar to increase production capacity of high performance solar cells and modules.

Cement Sector: French cement maker Vicat announced investment of Rs 1,200 crore in Karnataka to double its production capacity and investment of Rs. 510 crore in cement-grinding unit in Andhra Pradesh.

Tags:

Advertisement

12345...10...12