The refinancing of the infrastructure projects
through dedicated finance
companies — infrastructure debt
funds (IDFs) — has failed to grow in a big way in the last two years, despite regulatory reforms. Limited number of operational projects with one-year track record and reluctance of banks
to provide low-risk infra loans
are holding back growth of IDFs, according to rating agency ICRA.
are investment vehicles for channelising investment to the sector, sponsored by the commercial banks
and non-banking financial companies (NBFCs) in India for facilitating the flow of long-term debt
to the sector.
An IDF can be set up either as a trust (infrastructure debt
fund – mutual funds) or as a NBFC.
Currently, there are three IDF-NBFC’s operating in India — India Infra Debt
Limited and L&T Infra Debt
Fund. Rohit Inamdar, group head, ICRA, said there has been changes in the regulatory landscape yet the limited number of operational projects with track record of satisfactory performance for at least one year in the sector has impacted the lending activity of IDFs.