Launch of US$ 100 mn Pan-Asia Project Development Fund

Mumbai, January 19th, 2006, In the presence of Mr. P. Chidambaram, Honorable Finance Minister, Government of India, Mr. Y. Miyauchi, Chairman & Chief Executive Officer, ORIX Corporation (ORIX), Japan, one of the world's largest financial services corporations, and Mr. Ravi Parthasarathy, Chairman & Managing Director of Infrastructure Leasing & Financial Services Limited (IL&FS), India's leading infrastructure development and financing institution, have entered into a Joint Venture Agreement to jointly sponsor and manage the Pan Asia Project Development Fund (The Fund) with a target size of USD 100 million. IL&FS and ORIX have each committed USD 10 million to the Fund, which will fund the development of infrastructure projects in principal Asian markets such as Indonesia, The Philippines, Malaysia, Thailand, Vietnam and other Asian countries, including India.

Given the strong economic growth in India, local companies have successfully demonstrated capabilities in developing infrastructure projects in Asia. Due to their inherent cost advantages and technical competencies, Indian companies are increasingly gaining a strong foothold in the Asian infrastructure arena vis-?-vis their western counterparts. Similarly, Japanese companies have proprietary high-end technologies with the natural framework emerging for a mutually beneficial Indo-Japanese partnership. Speaking on this occasion, Mr. Anup Thakur, Economic Minister, Embassy of India in Japan, said, "We are very pleased with this initiative which is a true bi-lateral partnership between Indian and Japanese corporations. It is our expectation that a host of infrastructure initiatives with attendant project exports from the two countries could result from this effort."

Infrastructure projects require seed capital funding for converting the basic project concept into a bankable venture that incorporates aspects such as the privatization framework, technical and environmental studies, project cost, financial and legal structure, and financial viability. A rigorous project development exercise results in the project being ready for implementation, with bidders willing to pay a premium as these projects can be taken up for construction within a very short time period from the date of award of the bid, resulting in significant time and cost savings for the bidders. IL&FS has successfully developed, sponsored and implemented a large number of infrastructure projects in India, and had earlier set up the India Project Development Fund, which has been highly successful.

The Asian infrastructure sector offers attractive investment opportunities, and as per a study conducted by the World Bank, ADB, and JBIC, developing Asian countries alone would need to spend more than USD one trillion dollars over the next five years in various infrastructure sectors such as surface transport, urban infrastructure, communications and utilities.

The investment manager of the Fund is IL&FS Asian Infrastructure Managers Limited, a joint venture company set up by IL&FS Investment Managers Limited ("IIML"), the private equity investment arm of IL&FS and ORIX Corporation.

About ORIX Corporation, Japan:

ORIX is an integrated financial services group based in Tokyo, Japan, providing innovative value-added products and services to both corporate and retail customers. With operations in 24 countries and regions worldwide, ORIX's activities include corporate financial services, such as leases and loans, as well as automobile operations, rental operations, real estate-related finance, real estate, life insurance, and investment banking. As of March 31, 2005, ORIX had an asset book of USD 56.5 billion with revenues of over USD 8.5 billion. ORIX is listed on the Tokyo and New York Stock Exchanges. ORIX has significant presence in the entire South East Asian region and this presence can be leveraged with IL&FS project development expertise to jointly take forward and consolidate on the proposed activities of the Fund.

About IL&FS:

IL&FS is a multi-faceted organisation providing a range of fund and non-fund based financial services. IL&FS has been mandated with the commercialisation of infrastructure projects as well as providing a wide range of financial services. Broadly, its activities include financial services (including investment banking and asset financing), commercialisation of infrastructure projects and asset management. IL&FS has over the years established a unique positioning in the infrastructure sector in India, as a developer, sponsor, financier and facilitator. In the process, it has gained significant experience in project development, taking projects from "concept" to "commissioning" and has been able to establish linkages with a range of engineering, technology and contracting companies, both in India and overseas. IL&FS is currently working on the development of projects of an aggregate cost in excess of USD 10 billion.

About IIML:

IIML is one of India's largest domestic private equity fund management companies, managing over US$ 400 million on behalf of leading Indian and international institutions. IIML presently manages an array of funds focused on investments across infrastructure, life sciences, manufacturing, information technology, and consumer services. IIML is a publicly traded investment management company with its shareholding divided amongst its Indian and International shareholders. While IL&FS is the principal shareholder, Bank of India and IFC, Washington are other prominent institutional shareholders

For further details, please contact:

Priyank Vashisht

Rediffusion DYR Public Relations

5605 7248 / 56827122Pan-Asia Project

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