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Second India Infrastructure Project Financing Facility: Facility Completion Report

sector: Multisector | country: India

1. Project-related matters. The success of India Infrastructure Project Financing Facility II draws important lessons of building and maintaining strong partnerships during project implementation, not only with the government and India Infrastructure Finance Company Limited (IIFCL) but also with development partners, banks and financial institutions, project sponsors, and other stakeholders. Building awareness, continuous dialogue, and strengthening safeguard practices of IIFCL and banks/ and financial institutions are crucial to ensure effective project implementation and disbursements. With continuous support from development partners, IIFCL will build on integrating safeguard measures to minimize subproject risks through (i) continued training to enhance capacity of its environmental and social safeguard management unit and consortium partners; (ii) regular updates of its environmental and social safeguard framework (ESSF) to align with the requirements of development partners; and (iii) leading the advocacy with banks and financial institutions through workshops and dissemination. IIFCL conducted consultation workshops for banks and financial institutions on the ESSF approach for addressing safeguard issues when financing infrastructure public-private partnership projects. The extensive coordination and collaboration with other development partners such as the World Bank, Japan Bank for International Cooperation, and German development cooperation through KfW to develop a common ESSF is an important lesson in achieving successful project implementation. [Main text, para. 52]

2. ADB financial sector operations in India. The limited fiscal space for government guarantees, including to India Infrastructure Finance Company Limited, emphasizes the need for innovation and well-structured ADB interventions in the financial sector and infrastructure financing, including public nonsovereign operations, for ADB to remain relevant to changes and financial market developments in India. It is becoming apparent that domestic capital market reforms are important to address the issue of long-term capital and provide opportunities for insurance, pension, provident, and mutual funds to finance infrastructure development in India. [Main text, para. 53]

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