The much awaited Rs 50,000-crore (Rs 500 billion) infrastructure fund will finally see the light of day on Thursday.
The top brass of financial institutions -- Infrastructure Development Finance Company, ICICI Bank, Industrial Development Bank of India, the Life Insurance Corporation of India and State Bank of India -- are meeting in Chennai with prospective entrepreneurs to announce the modalities and structure of funding infrastructure projects.
FIs have laid down the norms, which will help bankable, infrastructure projects get off the ground and achieve financial closure. Senior FI officials said that while there is no dearth of funds, "the real problem is the mechanism of the project structure and the ability of servicing loans."
Borrowers can approach any of the FIs or IDFC for appraisal of their respective project.
"Projects will not be jointly appraised. The institution appraising the project will take an exposure in the project, and will contact other lenders forming part of this consortium to participate in the project funding," said a senior FI official.
The appraising body would undertake all the necessary paperwork for assessment of the proposal.
Now that the structure and modalities are in place, FIs will start taking up applications from various promoters both in the private and joint sector.
"There is immense scope for infrastructure development in the country. Now that we have put into place the necessary mechanism to make them bankable, financial closure should not be an issue," said a senior official from a leading bank.
It was felt that considering IDFC's expertise and human resources capital, the institution could assume the apex role in infrastructure funding on similar lines of the status enjoyed by Nabard for funding of rural infrastructure and Sidbi for financing of small industries.
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