Infrastructure Leasing & Financial Services Limited (IL&FS) Group, a leading infrastructure development and finance conglomerate, has entered into two memorandums of understanding (MoUs) with Industrial and Commercial Bank of China (ICBC), a prestigious commercial bank in the People’s Republic of China, and the China Huaneng Group, the largest state-owned power producer of China.
The first A memorandum of understanding (MoU) is an agreement between two (bilateral) or more (multilateral) parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement... More – between ICBC group and IL&FS group — facilitates co-operation in the area of infrastructure financing in India. ICBC group will consider providing financial support of up to $1 billion equivalent to the IL&FS group. These funds will be directed towards the infrastructure development requirements and related investments of the group.
The other MoU between IL&FS Energy Development Company Limited (IEDCL), a group company, and the China Huaneng Group, Huabei Branch, aims to jointly develop, implement and operate a 3,960 mega watt (mw) coal-based coastal power project in the Kutch district of Gujarat State in India. The thermal power project is a part of Special Economy Zone (SEZ), being developed by IL&FS Group, and has achieved significant level of project development including acquisition of land, statutory clearances and recommendation of Ministry of Environment & Forest (MoEF) for grant of environment clearance.
The MoUs signed as part of the visit of the prime minister Narendra Modi to People’s Republic of China signify an increased collaboration between the two countries. Ramesh Bawa, MD and CEO, IL&FS, said, “The spirit of cooperation between the two countries has not only meant that a defined development path can be put in place for the strategic objective of supporting infrastructure development, but it also provides a clear signal to the international community, of India’s growing attraction as an investment destination.”
Robust infrastructure is a pre-requisite for any developing country and these MoUs set the scope of cooperation among the three large entities in the area of infrastructure development in India.