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| Nabard plans long-term product for infra financing |
| Sanjay Jog / Mumbai Sep 01, 2010, 00:08 IST |
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State-run National Bank for Agriculture and Rural Development (Nabard), which has launched “Project Reposition” by roping in the Boston Consulting Group, has proposed a slew of initiatives including Nabard Infrastructure Development Assistance (NIDA), a longer tenure product (more than 10 years) for states.
Besides, Nabard has completed interactions with ITC, Future Group, FabIndia, Reliance Fresh, Heritage Foods for possible tie-ups in agricultural value chain. Talks have been initiated with National Collateral Management Services (NCMSL) for possible areas of collaboration, both in the form of equity and debt anticipation.
A Nabard official told Business Standard: “Project Reposition envisages value addition and diversification of Nabard in varied areas in addition to its core function of refinance. State governments of Punjab, Tamil Nadu, Haryana, West Bengal, Bihar and Karnataka during our recent meetings have expressed that they are keen on longer-term loans (more than 10 years) for on budget lending. If Nabard can introduce longer-tenure loans, these can replace, to that extent, the market borrowings of state governments. This would help in improving cash flows, which is an important factor for any state government.”
He informed that a bouquet of customisable offerings based on deliberations with state governments was under preparation. “One such product is Nida, a product lent to States on budget. This would be given with credit plus services, as required by the states. This loan will be flexible taking into considerations of needs of state governments,” the official noted.
Nida can focus on a range of agriculture and rural development sectors — irrigation, roads, power transmission, distribution and generation, specifically those focused on agriculture (dedicated agri-feeder lines), agriculture storage & marketing infrastructure, comprehensive development of rural habitation and social sectors. “Large number of high value projects are available with state governments in these areas but could not be covered under Rural Infrastructure Development Fund (RIDF) because of paucity of funds under normative allocation. State governments are also open to off-budget lending, annuity approach, SPVs, etc.”
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