In the wake of the government’s decision to allow partial use of foreign exchange reserves for domestic infrastructure development, India Infrastructure Finance Company Limited (IIFCL) is now taking the process forward by soliciting consultants to prepare a business plan for this unique financing model. Expressions of Interest (EoI) floated by IIFCL this month have managed to attract the interest of six-seven firms, and the company now expects to shortlist a consultant in three to four days.

“A committee has been appointed to assess the proposals of the various consultants who have shown interest and we expect a decision to be taken on this in the next couple of days,” revealed a highly placed IIFCL official. “We expect the assignment to be awarded in three weeks time, after which the consultant is expected to submit its report in six to eight weeks.”

The government and Reserve Bank of India (RBI), the custodian of the country’s forex reserves aggregating over $270 billion at last count, had in December 2007 approved a proposal to form a special purpose vehicle (SPV) that would borrow funds from RBI and lend to Indian companies implementing infrastructure projects in India, or co-finance their external commercial borrowings (ECBs) for capital expenditure abroad.

RBI had agreed to set aside $5 billion for the SPV, to be set up as a subsidiary of IIFCL in London.