IFC already has a 10 per cent stake in Srei's Rs 53.45 crore paid-up capital base. With this, IFC's total fund exposure in Srei, including equity translates into $36.5 million. IFC's fund exposure in Srei is one of its highest in India, after that in Housing Development Finance Corp. Managing Director Hemant Kanoria, who announced IFC's fresh credit line here on Monday, said that Srei "will start withdrawing this amount from next week".

The interest rate on this 12-year credit line, will be effectively 7.25 per cent, which is two percentage points above the 5.25 per cent Libor.

He added that there is a two-year moratorium on this $10 million line of credit from IFC. Srei, which is primarily involved in leasing of infrastructure equipment and infrastructure projects, is also part of a Rs 900-crore power project in Karnataka.

The financial closure of the 220 mw joint-venture project was achieved last week, according to Mr Kanoria.

This project is set up by Tanir Bavi Power Co Ltd. and is promoted jointly by GMR Group & Associates and US-based Fortune 500 company - PSEG Group.

According to a Srei press release, Tanir Bavi is an independent power company having an agreement with the Karnataka State Electricity Board.

While the PSEG Group has set up power plants having an aggregate 13,000 mw capacity, the GMR Group in India owns the private sector Vyasa Bank.

The machinery for the power plant will be sourced from GE Power of US and Hyundai Power Co. of Korea. Mr Kanoria is upbeat on the infrastructure industry in general, especially since highway projects worth Rs 28,000 crore and another Rs 60,000 crore worth rural road projects have been announced.

According to him, Rs 1,50,000 crore worth of projects in the infrastructure sector are in the offing.

According to an IFC study, at present there are 216 companies in leasing as a commercial product, with an estimated $4.2 billion in capital assets on lease.

In India, three per cent of total capital asset formation comes from leasing, which is ten times higher in the United States.