New Delhi: India Infrastructure Finance Corp Ltd (IIFCL) is in talks with the government for adding aircraft, commercial electric vehicles, and space infrastructure to the harmonised list of infrastructure, which would allow the state-owned lender enhance funding for sustainable assets, said a top company official.
The proposal aims to expand IIFCL’s infrastructure financing portfolio beyond traditional sectors such as road and power into newer, innovation-led segments, Palash Srivastava, deputy managing director at IIFCL, told ET.
The Harmonised Master List (HML) categorises infrastructure into five main groups, allowing it to access long-term credit at concessional rates, easier access to external commercial borrowings (ECB), besides availing funding from insurance or pension funds.
“We’d like to really move away, or at least distribute those assets, so that we can actually innovate and move more towards sustainable financing that includes commercial electric vehicles, bio CNG, sustainable aviation fuel, critical minerals, green steel and green cement, among others,” he said.
Srivastava noted the potential new areas as green shoots, which require some hand holding before they can be converted into financing opportunities. IIFCL is collaborating with the Coalition for Disaster Resilient Infrastructure (CDRI), International Solar Alliance (ISA), and Global Biofuels Alliance (GBA) for creating innovative structures to augment infrastructure financing to these sectors.
Need for bigger role of states, ULBs
Calling for a need to broad-base infrastructure project funding flows to also include states and urban local bodies (ULBs) in a major way, Srivastava said fiscal incentives are needed to prompt states and ULBs for investing aggressively in infrastructure financing.
“We would expect some kind of, say, incentive push for new products which are Fiscal Responsibility and Budget Management (FRBM) friendly so as not to constrain their balance sheets,” he said.
According to him, this can be done by routing them through the ₹1 lakh crore Urban Challenge Fund, pushing the subordinated debt product, a mezzanine structure that considers some of the risks involved or through bridge financing.
