Currently, loans for such projects under the scheme are restricted to companies, set up on non-recourse basis. With the proposed change, IIFCL could extend loans to the project companies or a special purpose vehicle (SPV), set up by the respective PSU or government for implementing the particular project.
There will, however, be a rider. The PSU borrower will have to create an escrow account from project revenue to avail of the IIFCL funding. The account would, of course, be managed by the lead bank.
Under the existing provisions, in view of the huge resource crunch faced by the government to finance the mega infrastructure projects, the Commission, at a meeting held recently, suggested an amendment to the IIFCL scheme for this purpose.
The meeting, sources said, also agreed to give loans to municipal corporations covered under the UPA governments ambitious JNNURM, subject to the same conditions creation of an escrow account from project revenues to be managed by the lead bank. JNNURM was launched by Prime Minister Manmohan Singh last year.