Setting up of Project Finance Cell
Requirement of enhanced capital expenditure to fill the ‘Infrastructure Gap’ and to develop world class infrastructure, at a time when the state finances are already constrained necessitate the need to evolve Innovative Financing Mechanism and to engage with varied class of investors. This is required more for the projects that can’t be taken up on PPP mode owing to various factors like low rate of economic return, high social value or being the basic infrastructure required to attract further investments.
IPL shall assist state governments in formulating ‘State Infrastructure Development Plans’ (SIDP) and handhold them till the implementation by offering to operate a dedicated ‘Project Finance Cell’. Such cells handhold & support clients throughout the project preparation process performing the following activities:
- Consolidation & Prioritisation of projects earmarked for implementation
- Segregation of projects under SIDP based on bankability/ suitability for PPP and for development by states
- Formulation of Macro Financial Strategy for implementing SIDP
- Preparation of Resource Mobilisation Toolkit using innovative fund raising options
- Preparation of Marketing Plan for continuous engagement with the prospective investors
- Effective Monitoring and generation of MIS for Implementation of Resource Mobilisation Toolkit
State PPP Cell
In order to meet the huge financing requirement for developing infrastructure, state governments require to tap the private sector capital for meeting the gap in state finances. States require a concerted off to devise and develop a robust mechanism to engage with the private sector and ensure that the best practices are efficiently transferred to the grass root level agencies. A state PPP cell acts as the nodal body, coordinating the efforts of the state for creating a climate, conducive for investment in infrastructure, by standardizing practices and building capacity of the grass root agencies in managing PPP contracts.
A PPP cell performs the role of a high level agency that acts as a think tank for the state government as well as the development agencies to seek advice and support in implementing infrastructure projects.
IPL engages with state governments to advise and provide support in setting up and managing PPP cells effectively. The broad roles & responsibility of a PPP cell shall be as follows:
- Preparation of Infrastructure Vision Document
- Operational Planning
- Developing standardised model documents across infrastructure sectors
- Evaluation of Projects submitted by the Implementing Agency
- Monitoring and reporting of implementation of projects
Assessment of Assets Life Cycle Cost
Our team of consultants assist the public authority in understanding, evaluating and building models for evaluating the asset’s cost over the full lifecycle. This helps in evaluating the various alternative modes of developing an assets and in proper phasing of the development of that assets. This ensures optimization of cost and maximization of the benefits from the project.
Project Appraisal & Financial Feasibility
Establishing financial feasibility is a critical step in the infrastructure project planning process. Many a plans have been developed by implementing agencies but have never seen the light of the day or have been stalled midway during construction, for lack of funds. Conducting financial feasibility study enables implementing agencies in making their infrastructure plans into financially sustainable ones. Deep understanding of the infrastructure project financing domain enables the IPL team to advise their clients on bankability of projects by running a comprehensive project appraisal process, thereby facilitating in structuring a financially sustainable projects.
Enhancing Project’s Viability for PPP
The success of a project to be developed on PPP basis depends upon how well the project is structured and defined. Our team of consultants assist the Public Authority in evaluating the project for its execution requirements, regulatory readiness, market adequacy, proper optimization & risk allocation, organizational capabilities, and attractiveness of project to raise adequate resources. This ensure that the project is ready for the next stage of development i.e. to bid out for execution by a Private Player.
Transaction Advisory & Bid Process Management
IPL team assists implementation agencies in running a transparent bidding process involving preparation of pitch books (PIM, RFQ/RFP documents), interacting with prospective investors to encourage participation and drafting contract documents in discussion with legal cell of the clients and legal experts. In addition, IPL team assists agencies receiving un-solicited proposals under the Swiss Challenge mode in evaluating the proposal received, handholding them through the process of negotiations with the original proponent, running a robust process for securing counter bids till eventual award of the project.
Assistance in Formulation of Policy & Regulations
As a result of the deep understanding of the Infrastructure sector, IPL helps regulators analyse the effect of various policies & regulations, by doing a comparative analysis of proposed policy alternatives, benchmarking with global best practices, stakeholder interactions to identify impediments to the development process and enable central and local regulators in devising a policy framework that promotes the growth of the sector. We also analyse effects of regulations on risk sharing across various public/private partnerships that necessarily operate at the intersection of legislative, political, regulatory and commercial considerations.
Services we provide for our clients include:
- Strategic & regulatory planning
- Regulatory & policy reform
- Analysis of proposed legislation & regulation
- Policy framework for enabling Public Private Partnership
- Preparation of PPP Toolkit/Policy
- Regulatory & policy making in Public finance
Innovative Financing Solutions
Unarguably, one of the most critical needs to restart the Indian economy is infrastructure spending. It is common knowledge that lots of infrastructure investments are running dry of funds. There is dire need to look beyond traditional methods of project financing, commercial banks loans, and unlock the potential of existing assets to attract higher and better growth capital.
IPL due to its deeper insight into the infrastructure financing sector, acts as Financial Advisor to assist project developers in accessing resources beyond traditional source by appraising, structuring and facilitating in resource mobilization through various products available in the market such as 1) Alternative Investment Fund: 2) Infrastructure Investment Trusts (“InvIT”) 3) Real Estate Investment Trusts (“REITs”)
IPL can assist for establishing these alternative means of financing vehicles by providing the following services: Unarguably, one of the most critical needs to restart the Indian economy is infrastructure spending. It is common knowledge that lots of infrastructure investments are running dry of funds. There is dire need to look beyond traditional methods of project financing, commercial banks loans, and unlock the potential of existing assets to attract higher and better growth capital.
- Preparation of a Detailed Business Plan/Pitch Document for each Vehicle (AIF/InVIT/ReITs): that will include a Roadmap and essential features of the AIF/InvIT/ReIT) and its suitability with respect to a detailed financing plan with options. Defining the Tenure, Potential Investor Class, Potential Sectors of Investment, Organisation Activities, & the roles to be performed in the Fund with respect to AMC & Investment Committee, Manager etc.
- Preparation of all documents related to the establishment of the Asset Management Company (AMC) and registration of the AMC with the registrar of companies.
- Preparation of all documents related to the establishment of the vehicle and registration of the vehicle with SEBI as an AIF/InvIT/ReIT for its final approval.
- Provide assistance with appraisal of projects and identification of revenue generating assets that can be leveraged for raising money from long term investors like Pension Funds, Private Equity Firms, HNIs etc.
IIFCL PROJECTS LTD sees capacity building as the process through which individuals, organizations and societies obtain, strengthen and maintain the capabilities to set and achieve their own development objectives over time.
Simply put, if capacity is the means to plan and achieve, then capacity building describes the ways to those means. An essential ingredient in the IIFCL PROJECTS LTD capacity building approach is transformation. For an activity to meet the standard of capacity building as practiced and promoted by IIFCL PROJECTS LTD, it must bring about transformation that is generated and sustained over time from within.
IPL can assist Urban Local Bodies, State Governments and various other institutions for all processed of Capacity Building such as:
- Capacity Building Workshops & Seminars
- Conferences on Infrastructure Challenges & PPP Rejuvenation
- Knowledge Papers & Consultation reports
- Policy Advocacy