Easing of ECB norms to raise infra finance cos’ borrowings
“We already have RBI approvals to borrow up to $750 million for the financial year, of which we had raised $250 million through syndicated term loans some time ago. If market permits, we will definitely look at enhancing our borrowing for the year, since the relaxation of norms gives us more room,” said Ajeet Agarwal, the director (finance), REC.
PFC too believes easing norms would surely be positive for infrastructure finance companies since foreign funding comes at a more nominal rate than local borrowing. “As of now we have $1.2 billion worth of line of credit from the World Bank, of which we have raised only $70 million. These kind of multilateral borrowings come at a rate of 50-60 basis points over and above LIBOR. Whether we will go for ECB route to borrow further or not will be decided later,” said a senior official at PFC.
The central bank has allowed infrastructure finance companies to raise up to 75% of their net owned funds through the ECB route under the automatic route (without RBI’s permission), up from the earlier limit of 50%. Under the approval route, companies will have to seek permission on a case-to-case basis
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