NHAI to ink pact with SBI for long-term unsecured loan of Rs 250 billion

NHAI will on Friday ink a pact with State Bank of India (SBI) for a long-term unsecured loan to the tune of Rs 250 billion.

This is SBI's highest long-term unsecured loan to any entity and also the largest ever loan sanctioned to NHAI.

"NHAI is getting an unsecured loan of Rs 250 billion from SBI for 10 years with 3 years of moratorium on repayments. This is the largest amount of loan to have been sanctioned to NHAI in one stroke by any institution," Ministry of Road Transport and Highways said in a statement.

An MoU in this regard will be signed tomorrow in the presence of Union Minister Nitin Gadkari.

NHAI had invited an Expression of Interest (EoI) from scheduled commercial banks for the long-term loan.

"In response to this EOI, SBI offered to fund the entire requirement of Rs Rs 250 billion based on one-month MCLR (marginal cost of funds based lending rate)," the statement said.

It said there is no principal repayment liability for initial three years and after that, the repayment would be done in 14 equal half-yearly installments.

The total sanctioned amount is to be disbursed to NHAI within March 31, 2019. NHAI can draw the amount in any number of tranches, the statement said.

NHAI has traditionally relied on borrowing through long term bonds issued to various investors, including LIC, EPFO and other qualified investors, and Tax Free bonds and Masala Bond issued in 2017.