Banks to vie for Rs 50,000-crore infra funding in Maharashtra

The banks are getting ready to take large exposure in funding the infrastructure development of Maharastra.

?Over a period of 4-5 years, Maharashtra would need around Rs 50,000 crore worth total investment to bolster its infrastructure growth. It includes debt funding from foreign as well as Indian players, worth around Rs 30,000 crore,? Nandkishor Kagliwal, president, Maharashtra Economic Development Council, said.

?I assess that around Rs 21,000 crore worth debt would be provided from the Indian banking sector. And, return on investments in these projects could be around 8-10%. It?s a huge opportunity for the domestic banks in the scenario when credit off-take is a cause of concern,? he said.

Manu Kumar Srivastava, principal secretary, urban development, Maharashtra state said, ?We are in constant touch with the leading bankers of the country in a bid to lure debt-financing in Maharashtra?s infrastructure growth. Not only the state-owned banks, even private banks in the country too are showing a keen interest in participating in the state?s infrastructure projects to be developed under PPP model.?

However, Srivastava said that getting long term debt finance for 10-15 years for infrastructure projects is a challenging task in the current scenario. ?We thus usually increase the governmental grant funding in these projects to minimise the long-term loan component to increase the viability.?

Rana Kapoor, managing director and CEO, YES Bank said, ?Our infra funding is expected to be at least around Rs 3,500 crore over a period of two years in the country. It would be about 20% of our total credit exposure. We will certainly focus on funding infrastructure projects in Maharashtra state, mainly in core segments like clean energy, power and logistics development.?

Hemant Contractor, deputy managing director, State Bank of India, said, ?Our endeavor would be to take a lead in debt-funding the infrastructure development in states like Maharashtra. And, we look forward an average return of 10-12% in the longer run from such projects.?

BA Prabhakar, executive director, Bank of India said, ?Our bank looks forward to get on an average 11% return on a 10 year long tenor by debt-financing the viable infrastructure projects in Maharashtra. Over next 2-3 years, we expect to invest around Rs 25,000 crore in country?s infrastructure story.? The scheduled Golden Maharashtra Infrastructure summit 2009 in Mumbai is expected to open a plethora of investment opportunities.