KIIFB to issue masala bonds for fund raising
Thiruvananthapuram: The state-backed Kerala Infrastructure Investment Fund Board (KIIFB) will issue masala bonds to raise funds for infrastructure development projects in the state through foreign investors.
The decision was taken at the KIIFB Director Board meeting. An asset management company will be formed for this purpose. Also profitable loans will be taken from different banks.
As part of the fifth phase of KIIFB projects, Rs 1391.96 crore worth projects have been sanctioned. With this, KIIFB has approved Rs 17,989.11 crore worth projects in total. In this phase of the project, Rs 324 crore has been allocated for KSRTC to purchase 1000 new buses, and Rs 241.72 crore for CUSAT to make it a Centre of Excellence in international standards and to renovate its research laboratory.
The meeting chaired by Chief Minister Pinarayi Vijayan also assessed the progress of the projects previously sanctioned by KIIFB. Finance Minister Dr Thomas Isaac, Chief Secretary Dr K.M. Abraham, State Planning Board Vice Chairman Dr V K Ramachandran, Financial Secretary Manoj Joshi, D. Babu Paul, Prof. C. P. Chandrasekhar, and Prof. Sushil Khanna also attended the meeting.
What is Masala Bond?
Masala bonds are bonds issued outside India but denominated in Indian Rupees, rather than the local currency. Masala is an Indian word and it means spices. The term was used by International Financial Corporation (IFC) to evoke the culture and cuisine of India. Unlike dollar bonds, where the borrower takes the currency risk, masala bond makes the investors bear the risk.
New projects of KIIFB
- 1000 new KSRTC buses – Rs 324 crore
- Punalur mount road – Rs 201.67 crore
- Perumbavoor bypass – Rs 133.24 crore
- Angamaly-Kochi airport bypass first phase – Rs 190.16 crore
- Life science park second phase – Rs 301.17 crore
- CUSAT centre of excellence – Rs 241. 72 crore