Tuesday 7 July 2009 - All stories compiled and edited by Bhaswati Das
State-owned India Infrastructure Finance Company (IIFCL) will refinance 60 per cent of commercial bank loans for public-private projects over the next 15-18 months. The move would ease the tight liquidity in the market for road developers and speed up highway development.
“IIFCL and banks are now in a position to support projects involving a total investment of Rs 1,00,000-crore in infrastructure. In consultation with banks, IIFCL would evolve a takeout financing schemes to facilitate incremental lending in the sector,” said finance minister Pranab Mukherjee, adding he would ensure sufficient funds for the sector.
Under takeout financing, a few banks come together to take over loan portfolios, in turn. For example, if ICICI, SBI and PNB finance a long-term project for 15 years, by turn they will lend for five years.
Road projects have failed to meet scheduled targets due to shortage of funds, delay in land acquisition, law and order problems and default by developers. “I have urged my colleagues in central and state governments to remove policy, regulatory and institutional bottlenecks for speedy implementation of infrastructure projects,” Mukherjee said.
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