HYDERABAD: In order to establish an urban infrastructure financing mechanism and to attract investment for financing and management of the urban infrastructure projects in the state, the Andhra Pradesh government, along with Infrastructure Leasing & Financial Services Limited (IL&FS), has set up AP Urban Infrastructure Asset Management Limited (APUIAML).
The government has also set up AP Urban Development Fund (APUDF) which will finance urban local bodies' infrastructure projects on commercial or public-private partnership (PPP) principles.
The government has appointed the chief secretary as chairman of APUDF's governing body and principal secretary (municipal admin), principal finance secretary and managing director of APUIAML as members.
According to officials of the municipal administration department, the new entity will be an asset management company (AMC) which will manage an urban fund.
“On one hand it will assist ULBs in preparing and structuring urban infrastructure projects on commercially viable models and, on the other, it will raise financial resources for the proposed urban fund through innovative instruments by leveraging government funds,” a top official of the department said.
The state government will have 49 pc share and IL&FS 51 pc in APUIAML. The initial equity capital of the joint venture company will be Rs 20 crore, of which the AP government will contribute Rs 9.80 crore and IL&FS Rs 10.20 crore.
APUIAML will provide services for government's urban housing, capital Amaravati and new cities being developed.
It will involve in project planning, identification, financial structuring, phasing project appraisal including financial analysis, financing strategy and project structuring. It will also look into debt syndication, loans, bond issue, fund management, investment management of various securities, assets procurement and contract management of identified projects.
APUIAML has become necessary as the funds available with the state government are hardly adequate for planned urban development. Hence, the urgent need for such an institutional structure for leveraging government resources and adequate flow of long-term funds for urban development by accessing capital market, banks and financial institutions.
Further, APUIAML will help the government set up, institutionalise and manage APUDF by mobilising resources from different sources like banks and financial institutions, including private sector arms of multilateral and bilateral agencies like ADB, financial instruments issued in the capital market, by leveraging government grant and other forms of financial assistance.