National Bank for Financing Infrastructure and Development targets Rs 5 lakh crore book by FY30. MD Rajkiran Rai tells Kshipra Petkar that launching partial credit enhancement, expanding into advisory services, and navigating new project finance norms are some of the main challenges for infrastructure and renewable energy sectors. Excerpts:
Q What is the roadmap for next 3-5 years?
We have ramped up very fast. We add at least 1 lakh crore to our book. Maybe this year, we reach about Rs 1.15 lakh crore on the balance sheet side. While our sanction pipeline will cross Rs 3 lakh crores this year so, from next year the pickup will be much faster. So, our balance sheet by FY29-30, our book should be at least Rs 5 lakh crore.
Q What are the other segments that you are currently working on?
Partial credit enhancement is one thing which we launched today. Then, we are also getting into transaction advisory. Many state governments have ideas but to convert it to a bankable project, they need help. That is where we are coming in.
Q With the final project finance guidelines coming into effect on October 1, how do you see that changing the landscape?
The project finance guidelines are very clear and leave no room for ambiguity—I’m fully comfortable with them. At the greenfield stage, particularly during construction, a 1% provision is required. That’s not a concern. We’ve priced this into our system. Naturally, during construction, the higher provision means slightly elevated costs and interest rates. However, we make an upfront commitment: once the project becomes operational, rates are immediately reduced as the provision drops to the standard 0.40%. This applies only to the construction phase, and we don’t see it as a challenge. The framework is well understood by all stakeholders.
Q Do you plan to tap the overseas market this financial year?
For us liability diversification is something which we will continuously look at. But, at the same time, pricing is also an issue. Domestic money has become so cheap so, going international is not ideal. But we are keeping all the options open, and we have all the approvals in place.
Q Are you in talks with any multilaterals for tie-ups?
We are in advanced talks with 2 multilateral institutions and they are coming in for very specified cases. One is coming as a backstop for the partial credit enhancement, and the other is working on blended finance and equity funding.