The Union cabinet has cleared a proposal to allow Japan bank for international cooperation (JBIC) to pick up 26 per cent stake in Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC). Union government will have 49 per cent stake while state owned financial institution would hold about 25 per cent in the project. The project when completed over next 20 years is billed to be $ 100 billion venture.
No financial implications will be involved after revised equity structure on Indian government.
JBIC equity stake will enable the DMIC to leverage assistance and cooperation from Japanese government.
Long term financing institutions in Japan like pension funds have limited experience in India and 26 per cent equity would give them comfort level and a feeling of participation in the project. This would open up possibilities for long term infrastructure lending at lower rates.
Delhi Mumbai Industrial Corridor (DMIC) is being developed as a global manufacturing and investment destination utilising the high capacity 1483 km long western dedicated railway freight corridor, as the backbone.
As approved by cabinet in August 2007, DMICDC was incorporated on January, 2008 with authorized equity base of Rs.10 Crore (49 per cent equity participation by Indian government, 41 per cent by IL&FS and 10 per cent by one DFC) for developing projects, coordinating their implementation and raising finances.