International Finance Corporation (IFC), the investment arm of World Bank, has extended loan support of $75 million (~Rs 557 crore) to Indospace Logistics Parks III, a $580-million vintage fund for developing logistics and industrial parks across India.
- Objective: To enhance warehousing and supply chain infrastructure in India
Key Points:
i.Indospace will use the investment to develop an efficient logistics ecosystem in India and facilitate domestic and foreign trade.
ii.Through the investment, Indospace will expand and lease to e-commerce players and online retailers in India to meet their demand.
iii.The investment will also support it to build a warehouse in Luhari III, a site near Gurgaon, Delhi, and other key areas in North India.
iv.In September 2020, IndoSpace partnered with Kool-ex to build 3 customized temperature-controlled Pharma Distribution Centres in Mumbai, Delhi, and Bangalore.
- The first one in Mumbai will be India’s largest stand-alone temperature-controlled warehousing facility.
v.Hence, the current funding will also strengthen the warehousing facilities to accommodate the demand for essentials, like pharmaceuticals and Fast-Moving Consumer Goods (FMCG).
Warehousing:
i.Warehousing (the process of storing goods in a warehouse), which is the fundamental part of logistics, is being undersupplied in India. Around 90 percent of this market is being managed by unorganized players.
ii.Logistics costs in India were estimated to be at around 13 to 14 percent of Gross Domestic Product (GDP), compared with around 9 to 10 percent in the US and Europe.
iii.A funding of $13 billion is required for the development of new warehousing capacity in India over the next decade.
About Indospace:
It is the largest investor, developer and manager of industrial and logistics real estate in India. It is a joint venture between the Everstone Group, GLP, and Realterm.
Establishment – 2007
Headquarters – Mumbai, Maharashtra
Managing Partner & CEO – Brian Oravec
About International Finance Corporation (IFC):
Establishment – 1956
Headquarters – Washington D.C., USA
MD, Executive Vice President – Makhtar Diop
