Project Finance 2023 – India Global Guide

Scheduled commercial banks – both state-owned and private – have dominated the infrastructure financing space for a long time. Non-banking financial companies are also a source of financing. Given the broad horizon of investments, infrastructure debt funds and state-owned specialist institutions such as the National Investment and Infrastructure Fund and India Infrastructure Finance Company Limited have emerged as alternatives, supplementing the traditional financiers. The National Bank for Financing Infrastructure and Development has been set up and is in the process of being operationalised as an Indian development financial institution, to support the development of long-term infrastructure financing in India.

Certain development finance institutions, multilateral agencies, international banks and export credit agencies have been active in the project financing market. The Regulations in relation to External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency (which are applicable to foreign institutions lending in foreign currency and to Indian companies issuing foreign bonds outside India) permit overseas lenders from jurisdictions that are compliant with the Financial Action Task Force (FATF) or the International Organization of Securities Commissions (IOSCO) to extend financing subject to certain restrictions on minimum average maturity, ceilings on interest, end use, etc.

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