State Bank of India (SBI) and the National Investment and Infrastructure Fund (NIIF) Monday inked a pact to boost availability of capital for infrastructure projects.
The scope of the memorandum of understanding (MoU) includes equity investments, project funding, bond financing, renewable energy support and take out finance for operating assets, SBI said in a statement.
The objective of this initiative is to aid in filling the gap at a time when the availability of equity and debt financing for infrastructure has moderated, it said.
The initiative will address concerns related to availability of equity and long-term debt funding options to large-scale projects thereby stimulating infrastructure development, SBI Chairman Rajnish Kumar said.
The availability of post-construction takeout equity and debt financing for developers and builders of infrastructure projects will play an important role in the infrastructure development cycle in India, NIIF Chief Executive Officer Sujoy Bose said.
The statement further said the initiative will help SBI and NIIF review opportunities to unlock capital from operational projects, thereby creating room for fresh lending and addressing asset-liability mismatches.
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In addition to focusing on takeout financing, including through the Infrastructure Development Fund route, the partnership will also explore new avenues of financing renewable energy projects, it said.
During the financial year 2018-19, SBI through its specialised Project Finance & Structuring Business Unit has extended financial assistance of about Rs 51,000 crore to 47 infrastructure projects and during the current financial year, the bank has a robust pipeline.