labels: Roads
Budget gives impetus to highway projects through IIFCL news
07 July 2009

India Infrastructure Finance Company (IIFCL) will boost public-private projects for roads and highways by refinancing 60 per cent of commercial bank loans in the next 15-18 months.

''IIFCL and banks are now in a position to support projects involving a total investment of Rs1,00,000 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 during his budget speech on Monday.

The proposed new model of 'takeout financing' allows banks to come together and take turns to hold loan portfolios. 

Allocation to National Highways Development Authority for its national highway development programme has been increased by 23 per cent to Rs8,578 crore.

Infrastructure has emerged as a key focus of this year's budget with increased allocations for highways, irrigation programmes, rural development, and power. (See: Mukherjee envisages Rs100,000 crore spending on infrastructure)

The new scheme of 'takeout financing' is aimed at solving the asset-liability mismatch for banks and fund high-cost, long-term projects.

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Budget gives impetus to highway projects through IIFCL