Infrastructure Leasing Finance

Here we have taken the Infrastructure Finance Services provided by IL &FS i.e. Infrastructure
Leasing & Financial Services Limited

Infrastructure Leasing & Financial Services Limited (IL&FS) is one of India's leading
infrastructure development and finance companies.

IL&FS was promoted by the Central Bank of India (CBI), Housing Development Finance
Corporation Limited (HDFC) and Unit Trust of India (UTI). Over the years, IL&FS has broad-
based its shareholding and inducted Institutional shareholders including State Bank of India, Life
Insurance Corporation of India, ORIX Corporation - Japan and Abu Dhabi Investment Authority 

IL&FS has a distinct mandate - catalysing the development of infrastructure in the country. The
organisation has focussed on the commercialisation and development of infrastructure projects
and creation of value added financial services

From concept to execution, IL&FS houses the expertise to provide the complete array of services
necessary for successful project completion: visioning, documentation, development, finance,
management, technology and execution

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Beyond Infrastructure

IL&FS, we understand infrastructure to be more than the sum of its parts. We mix brick, mortar,
technology and management with warmth, hope, promise and potential

Infrastructure is all-pervading. Be it the ultra-modern metropolis or the rural backwater,

infrastructure is pivotal to all that is involved in the daily business of living. From households to
hospitals, public parks to businesses, entertainment to education, agriculture to industry,
infrastructure matters, deeply

For IL&FS, the vision of the end result, motivates the process. An aspiration fulfilled. A
community empowered. A region enriched. Such is the impetus that drives us to catalyse small
developments that make big impacts

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Public Private partnership

IL&FS is widely recognised as the pioneer of Public Private Partnership in India

Today IL&FS has evolved into a prominent institution that harnesses the power of Public Private
Partnership, to develop and finance infrastructure projects across a variety of sectors. Almost
uniquely, IL&FS has succeeded in turning infrastructure capacity creation into a commercially
viableproposition
Our infrastructure projects are developed in conjunction with Governments, financing agencies,
private sector partners and communities. This unique Public Private Partnership helps to leverage
limited public funds, reduce life cycle cost, develop and execute more projects on a sustainable
basis
IL&FS is committed to providing projects with financial investment, managerial expertise and
inputs that ensure efficiency in service delivery. We offer a full range of financial, project
development and management services. These services include investment banking, project
financing, project development, management and implementation, asset management, merchant
banking, corporate advisory services and back office services

Successful infrastructure projects require the close involvement of an array of stakeholders.

IL&FS has sponsored various projects in the infrastructure space in association with a range of
partners that encompass both State Governments as well as Private Sector Partners, including
communities. IL&FS identifies need-driven projects (e.g. roads, bridges, power, ports, water
supply, area development etc.) which can be commercially viable. IL&FS then uses innovative
structural / financial techniques to enhance project viability and has already successfully
pioneered several such projects

Over the years, building on experience gained in the infrastructure space, IL&FS has widened its
business scope from mere development of infrastructure projects to encompass a full range of
relatedactivities. 

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Road Ahead

IL&FS’ infrastructure development initiatives have been sectorally and geographically diverse.
Strategic relations with State Governments across India and on-going relationships with various
departments of the Central Government have helped widen the IL&FS Group’s national
footprint. IL&FS has catalysed over USD 8 billion for infrastructure projects and is currently
working on projects with an aggregate cost of USD 10 billion

IL&FS has continually judged project effectiveness by outcomes - outcomes such as increased
exports and employment after an Area Development project in Tamil Nadu; vigorous economic
activity witnessed in a region after the development of a major road link. By focussing on project
outcomes, IL&FS has helped garner the economic potential of projects for all stakeholders. In
the process, IL&FS is transcending from project development and management to capacity
building and value realisation

IL&FS views itself as a proactive and innovative partner in the creation of world class
infrastructure in the country. All its forthcoming projects and initiatives are focussed on realising
this vision. Towards this end, IL&FS is involved in a wide gamut of innovative projects across
sectors, throughout the country

The IL&FS Group has developed the requisite capabilities to take infrastructure projects from
concept to commissioning. The organisation has developed a pool of institutionalised resources

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and functional expertise in various areas. These areas include project management, project
engineering, finance, risk management and environmental-social management, all of which are
strategic to the infrastructure development activity

Groups

Infrastructure Services

1. IL&FS Infrastructure Development Corporation Limited

2. IL&FS Transportation Networks Limited
3. IL&FS Ecosmart Limited
4. IL&FS Education and Technology Services Limited
5. New Tirupur Area Development Corporation Limited
6. Noida Toll Bridge Company Limited

Finanvial Services

1. L&FS Investment Managers Limited

2. IL&FS Trust Company Limited
3. ORIX Auto Infrastructure Services Limited
4. IL&FS Financial Services Limited
5. IL&FS Securities Services Limited

Sectors

Organisationally, the IL&FS Group has evolved along routes perfectly configured to business
requirements. Technical support and service groups provide specialised expertise. Project
development and sectoral companies house the ability to seed initiatives and carry them through
to completion. Strong core skills - key to successful project development and project financing
across sectors - have been developed within the Group. These have aided IL&FS in spreading its
expertise across a variety of sectors, nationwide 

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  Transportation
 Area Development
 Cluster Development
 Finance
 PowerPorts
 Water & Waste Water
 Urban Infrastructure
 Environment
 Education
 Tourism

Projects

IL&FS’ infrastructure development initiatives have been sectorally and geographically diverse.
Strategic relations with State Governments in seventeen states and on-going relationships with
various departments of the Central Government have helped IL&FS develop projects across the
country

With each project IL&FS has focussed on creating transparent, accountable and convergent
processes. In parallel, IL&FS has devised innovative mechanisms to facilitate project financing
and financial products and services that add value to individuals and corporates
Post project commissioning, IL&FS is also involved in stabilising project revenues, planning
project financials with particular emphasis on debt servicing and managing stakeholder value

The objective of the Project Development units in IL&FS is to identify, conceptualize, structure,
develop and eventually deploy resources in a variety of infrastructure projects. This is without
recourse to budgetary allocations from the Government / local bodies. In short, the objective is to
create the necessary framework that facilitates private enterprise to invest in infrastructure
projects. This in turn accelerates the development of commercial infrastructure in India

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In partnership with the Government, It helps create replicable commercial prototypes and
suggest and evolve requisite policy / legislative framework

As Project Developer / Sponsor, the co. help create appropriate project structures, achieve
technical / financial close for the projects and finally, divest to an operator to maintain facilities
over the project life

As an Advisor, the co. assist Governments, local authorities & bodies, and sponsors to undertake
the projects, provide financial structuring and investment banking solutions

Areas in which IL&FS has undertaken project development activities are Urban Infrastructure,
Area Development, Transportation and Tourism
Positioned at the cutting edge of the infrastructure sector, IL&FS specialises in innovative
techniques and mechanisms for developing and financing infrastructure projects. The IL&FS
Group today employs over 600 dedicated and high-potential personnel. Following the rationale
of domiciling similar clusters of skills together to derive maximum efficiencies, the IL&FS
Group today comprises a range of highly specialised and innovative companies. The IL&FS
Group provides a professional, dynamic and supportive environment for career development
across a variety of specialised activities, through the range and breadth of its portfolio

Financing of infrastructure development is always a challenge in light of long time horizons,

wide range of stakeholders, existence of direct as well as indirect beneficiaries, need to minimise
freeloading etc. Moreover, many benefits of infrastructure improvement are not readily
quantifiable at the outset, but reveal themselves as linkages and spin-off benefits down the line.
Consequently, the design and structuring of financial packages that address all the above
parameters calls for strong domain expertise, awareness of trends in infrastructure financing in
India and overseas, creative thinking and even consumer behaviour

IL&FS continuously seeks to strengthen its capacities in the areas of infrastructure project design
and finance. They seek people who will not stop at vanilla packages but evolve innovative

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structures and solutions that address the needs of our clients. Thinking outside the box is a key
prerequisite, as is experience in the infrastructure field, with a demonstrable record of
achievements

environmental and social policy framework

In November 2000, IL&FS incorporated IL&FS Transportation Networks Limited (ITNL) in

order to pursue various new project initiatives in the area of Surface Transport. IL&FS has
domiciled its transport sector investments and resources in this company and now represents
itself in this sector through ITNL,l

The focus of ITNL is to develop and build a pan-India Surface Transport business. ITNL has
accomplished this by leveraging various investment opportunities and also acquiring and
managingprojects.

ITNL has been involved in the development and implementation of projects related to Highways,
Flyovers, Bridges and Roads across the country. These projects, both at cash generation stage
and/or at construction stage, have been benchmarked to meet international standards in terms of
technology and facilities

ITNL has over the years acquired a position of leadership in the roads sector and has expanded
its scope of activities to Ports, Railways and Urban Transport Sectors.
In an effort to proactively add value, enhance sustainability and lower risks in all its projects,
IL&FS developed Environmental and Social Report (ESR), in 1995. The objectives of the ESR
were to:

a. mainstream Environmental and Social (E&S) considerations in the overall project cycle,
b. set examples of environmentally sound and socially acceptable practices, and
c. inspire and encourage all stakeholders, including partners and co-investors towards
continual improvement in the spheres of project development, implementation,
monitoring and closure

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This ESR made IL&FS the first non-banking financial company in India to make E&S
considerations inclusive in project development and implementation

As a step to align with the International Financing Institutions (IFIs), IL&FS signed the United
Nations Environmental Programme Finance Initiative (UNEP FI) on December 5, 2006. This
aspirational commitment underscored IL&FS’s interest to pursue establish Environmental and
Social Governance (ESG) in its business operations

In 2007, IL&FS decided to update the ESR in the form of Environmental and Social Policy
Framework (ESPF). Updation became relevant in the light of the changing environmental and
social governance in India. Besides, IL&FS’s business canvas expanded with a wide range of
services covering project development & implementation, financial transactions and advisory
services across Business Verticals (BVs) and Special Purpose Vehicles (SPVs)

In 2009, IL&FS adopted the ESPF for phased implementation

The ESPF is guided by the Policy Statement as below.

The Environmental and Social Policy of IL&FS

Infrastructure Leasing & Financial Services (IL&FS) Limited is driven by its mission to
develop, implement, operate, finance and participate in infrastructure projects through Public
Private Partnerships, as well as to provide value-added financial services

The IL&FS Environmental and Social Policy and Framework (ESPF) is founded on the concept
of Sustainable Development and thereby recognizes Environmental and Social (E&S)
considerations in its business operations to add value, minimize impacts and risks to increase
effectiveness of infrastructure projects. IL&FS strives to conserve natural resources, protect the
environment and restore standards of living for those affected by its operations

The ESPF applies to the business canvas of IL&FS including its subsidiaries and associate
companies

IL&FS is committed to comply with its E&S policy, applicable laws of the land and be
responsive to existing and emerging global E&S concerns on a proactive basis

sd/- sd/-
Chairman Managing Director

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This Policy Statement is implemented through the Guiding, Operational and Engagement
Principles:

a. Through its Guiding Principles (GP), IL&FS commits to

i. adding value to all projects and transactions it undertakes,

ii. integrating E&S concerns into the decision-making process, and
iii. minimizing exposure to E&S and financial impacts and risks.

b. The Operational Principles (OP) provide procedural guidance to IL&FS, its subsidiaries
and associate companies as well as third parties involved in execution of
Projects/Transactions/Advisory Mandates

i. the OPs of the ESPF are equivalent to the environmental and social frameworks
of Multilateral Development Banks such as the World Bank and Asian
Development Bank as well as compatible with Equator Principles (EP),
ii. the OPs are adaptable so as to be commensurate with the nature of the business
activities of the relevant company, its products and services, and the locations and
conditions in and under which it operates.

c. The Engagement Principles (EPs) apply to Projects/Transactions/Advisory Mandates

where IL&FS does not / cannot exercise complete control over the organization or
business activity. These principles emphasize on communication of good environmental
and social management practices to the clients and partners.
d. The Noida Toll Bridge Company Ltd. (NTBCL), incorporated in 1996, has been
promoted by Infrastructure Leasing and Financial Services Ltd. (IL&FS) and New Okhla
Industrial Development Authority (NOIDA), as a special purpose vehicle (SPV) to
develop, construct, operate and maintain the DND Flyway on a Build Own Operate
Transfer (BOOT) basis. The  DND Flyway connects Delhi with Noida/Greater  Noida.

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 e. The project has been supported by Indian and  international engineers, contractors,
operators and investors. The Project is an outcome of innovative technical and financial
engineering, has been built  with due care for environmental concerns. The Citizens
Committee was formed to oversee the requisite environmental safeguards during
construction - a feature noted by the World Bank as being the first of its kind in the
world. The project was commissioned on  February 7, 2001, 4 months ahead of schedule
and broadly within the budgeted  project cost of Rs. 4.08 billion

IL&FS Trust Company Limited (ITCL), a subsidiary of IL&FS, is one of the leading fiduciary
service providers in India
ITCL provides various trusteeship and allied services as an Independent Fiduciary Service
Provider for:
 debt issuances and loans
 securitised paper
 mutual funds, private equity, venture
capital funds
 social trusts, not for profit trusts and
other special purpose vehicles
The personalised and multidisciplinary approach encourages the Customers to choose the
structure best suited to their requirements

Vision
ITCL's Vision is to
Be the first choice global fiduciary service provider, protecting the interest of the participants in
commercial transactions by
 Pioneering innovative solutions
 Demonstrating integrity, transparency
and consistency
 Leveraging domain knowledge and
technology

IL&FS has established an exclusive business unit called the Cluster Development Initiative to

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address the infrastructure, market access, technology and finance requirements of SMEs through
development of modern industrial clusters in textiles, pharmaceutical, leather, light engineering,
agro/food processing,s crafts and other industry verticals across the country. IL&FS has also
been appointed as Project Management Consultant by GoI to set up 25 integrated textile park
clusters in the country

In particular, it has spearheaded the implementation of the Tirupur Area Development Program
where it has worked with the Tirupur Exporters Association, the Government agencies and other
stakeholders, in addressing key infrastructure bottlenecks

The Indian manufacturing industry is characterised by the predominance of Small and Medium
Enterprises (SMEs) located in clearly identifiable sector / product specific geographic clusters.
United Nations Industrial Development Organisation (UNIDO) estimates that there are at least
388 such important industrial clusters in the country covering the sectors such as textiles, leather
etc, which contribute a significant share of the country’s employment and exports

A singular constraint faced by the SMEs in these clusters has been lack of adequate and quality
infrastructure, which is adversely affecting industrial competitiveness. It is in this
context that IL&FS has established an exclusive business unit namely, Cluster Development
Initiative (CDI), with the primary objective of addressing the critical infrastructure problems in
SME industrial clusters on a commercially sustainable basis

IL&FS, through Cluster Development Initiative, provides a broad range of turnkey services. The
scope of services to be provided would include, inter alia:

Developing appropriate institutional and financial structures for efficient implementation of

the Project
   

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 Creating appropriate contractual structures for layout, design, detailed engineering,
preparation of cost estimates of the infrastructure facilities, bid documents, selection and
appointment of contractors / consulting firms for specific activities to ensure smooth
implementation of the project
   
Raising funding for implementation either as public financed project/s or leveraging the
budgetary resources of the authority and government to attract private capital in
infrastructure project/s
   
Ensuring efficient utilisation of these funds to create good quality infrastructure assets
without cost and time overruns
   
Assisting to obtain reimbursement of Project specific funds and / or grants sanctioned by
Central and State Governments
   
Establishing sustainable systems and contractual structures for effective operation and
maintenance of the Project

News about the co.

MUMBAI: Reliance Ventures Limited (RVL), a wholly-owned subsidiary of Reliance Industries

Limited , and Infrastructure Leasing and Financial Services Limited (IL&FS), on 25th January
Tuesday said that they have entered into an agreement, whereby IL&FS will become a strategic
partner and co-promoter of a project to develop a model economic township and other
infrastructure facilities at Jhajjar in Haryana.

This project is a spin-off from Reliance Haryana SEZ Ltd, which is a joint venture between RVL
and the government of Haryana. IL&FS will acquire a 45% equity interest in this new project
company. RVL and the government of Haryana will hold 45% and 10%, respectively.

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