Infra funds to get a push with escrow first charge
The new model tripartite agreement between the National Highways Authority of India, the road builder and IDFs also bestows on these funds the title of “senior lender” and gives them all rights and privileges as enjoyed by the lead bank. The moves are aimed at encouraging banks and financial institutions to launch IDFs, which are expected to play a key role in addressing the asset-liability mismatch between available bank funds and road projects where funding is required for long periods, as much as 25 years in some cases. IDFs help free up bank funding for newer projects.
According to a finance ministry notification, “The authority (NHAI) shall, instead of depositing the termination payment in the escrow account of the project, redeem the bonds by making payments due and payable to the debt fund, and the balance, if any, shall be paid into the escrow account.”
Hobbled by land and forest clearance
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