The finance ministry has directed development financial institutions to extend guarantees to infrastructure projects affected by sanctions. The sanctions will have a bearing on the financing of the various power and telecom companies, which are in different stages of setting up their projects.
The majority of the projects that will be affected are those that have received approval for guarantees and loans from the US Exim Bank, in whose place the financial institutions are expected to step in.
FI officials said they were gearing up to take on the added burden of sanctions-affected projects.
"But we have our own funds constraint and our exposure is limited by the prudential norms of the Reserve Bank. We are ready to help the projects," the official said.
Sources said that several projects are looking for alternative finances from other countries that have not imposed sanctions. But this is likely to take time and the domestic FIs may be called upon to bridge the need for funds in the intervening time.
The credit rating agency Crisil has estimated that approximately 15,000 mw of projects, including about 3,800 mw of counter-guaranteed projects, that are in the advanced stages will bear the brunt of the sanctions.
About 40 per cent of these projects have either promoters or engineering, procurement and construction contractors based in the US and could be abandoned or delayed.
Sources said fast track projects like Cogentrix and Enron and several other large power projects could be adversely affected since such projects contemplated significant US Exim Bank financing.
