This presentation covers financing options for various infrastructure projects in india and also fdi allowed ,stats and figures on such investments .

1.  Deepa Chandiramani 08
 Ansel Fernandes 21
 Rucha Jadhav 39
 Chinmay Kambli 46
 Akshay Nagbhire 87
POSSIBLE FINANCING OPTIONS FOR
PROJECTS IN INDIA

2. CONTENT
 Bank Financing & Own Funds
 IIFCL
 IFCs
 FDI
 Infrastructure Bonds
 Infrastructure Debt Funds
 Take-Out Financing
 Take-Out Financing through ECB Route

3. BANK FINANCING & OWN FUNDS
 Own Funds
 Term Loans – Rupee and Foreign Currency
 Soft loans
 Deferred payment guarantee
 Syndicated loans
 IRB infrastructure
 Total amount – Rs. 3177 Cr.
 Equity – Rs. 863 Cr.
 Debt – Rs. 1756 Cr.
 Cost of debt- 11.75%
 Consortium lead by IDBI

4. IIFCL
 Sectors eligible
 Cumulative gross sanctions of over Rs. 63,800 crore under direct
lending to more than 360 projects
 Financing instruments & schemes
 Direct lending
 Takeout finance
 Credit enhancement scheme
 Refinance scheme

6. IFC’S
ELIGIBILITY OR ENTRY POINT NORMS FOR
REGISTRATION
 A minimum of 75 per cent of the total assets of an IFC-NBFC should be
deployed in infrastructure loans.
 The company should have minimum net-worth of Rs. 300 crore.
 The minimum credit rating of the company should be at 'A' or equivalent
of CRISIL,CARE, ICRA or equivalent rating by any other accrediting
rating agencies.

7. Sr. No. Category Infrastructure sub-sectors
1. Transport
i. Roads and bridges
ii. Ports
iii. Inland Waterways
iv. Airport
2. Energy
i. Electricity Generation
ii. Electricity Transmission
iii. Electricity Distribution
iv. Oil pipelines
3. Water & Sanitation
i. Solid Waste Management
ii. Water supply pipelines
iii. Water treatment plants
iv. Irrigation (dams, channels, embankments etc.)
4. Communication i. Telecommunication (Fixed network)
ii. Telecommunication towers
“Infrastructure loan” means a credit facility extended by NBFCs to a
borrower for exposure in the following infrastructure sub-sectors:

8. FOREIGN DIRECT INVESTMENT
PROCEDURE FOR RECEIVING FDI
 Automatic Route
 Government Route

9. GOVERNMENT INITIATIVES TO
ENCOURAGE FDI IN INFRASTRUCTURE
 100 percent FDI is allowed under automatic route for infrastructure
development in power sector.
 FDI of 100% is permitted under automatic route in infrastructure
related to petroleum products, natural gas pipelines and petroleum
refining by private sector.
 100 percent FDI is permitted under automatic route in setting up new
and established industrial park.
 Single window clearance mechanism for issue and review of
clearance associated with important projects under the Cabinet
secretary.

10. TAKE OUT FINANCING
 Meaning
 Eligibility
 Institutions that can engage in such practices
 Problems with takeout financing

11. TAKE OUT FINANCING APPROVED
THROUGH ECB ROUTE
 Eligible Borrowers : Sea ports , roads including bridges and power sectors
for the development of new projects
 Conditions
 Tripartite Agreement : The Buyer , The Banker & The Builder
 Maturity- 7 Years
 The fee payable, if any, to the overseas lender until the take-out shall not
exceed 100 bps per annum.
 Domestic banks / Financial Institutions will not be permitted to
guarantee the take-out finance.
 The domestic bank will not be allowed to carry any obligation on its
balance sheet after the occurrence of the take-out event.
 ECB should not be raised from overseas branches / subsidiaries of
Indian banks.

12. INFRASTRUCTURE BONDS
 Floated for infrastructure projects
 Benefits the investor and the country
 Expected returns
 Tax benefits
 Conditions
 Subscriber
 Minimum investment
 Lock-In period

13.  Eg. - State-owned IDBI Bank raised Rs. 1,000 crore from bonds on
Feb 9, 2016 to fund infrastructure projects.
 IDBI Omni Infrastructure Bonds 2015-16 Series III are
unsecured, non-convertible redeemable bonds.
 The 10-year bonds will have coupon rate of 8.80 %

14. INFRASTRUCTURE DEBT FUNDS
 Mechanism
 Regulators
 Tax Benefits

15. Shareholding pattern
Member %
ICICI 31
Bank of Baroda 30
Citi Bank 29
LIC 10
Total 100
First Infra-Debt Fund of
India

16. BORROWING CAPACITY
ESTIMATION
 Suppose the project company would like to know how much debt can be raised for the
project which is expected to generate $ 200 million in the first year of operation. This
revenue is expected to grow at an annual rate of 6% per annum and period of operation is
around 15 years. Similarly, in the first year of operation, the expected expenses has been
estimated to be around $34 million and this expense is expected to grow at the rate of 4%
per annum. The project will be placed in the income tax bracket of 40% and non-cash
expenses deductible for tax purposes each year is estimated to be around $2 million. The
targeted coverage ratio is 1.50 and the interest rate on debt is 10%.
 Substituting the values in the equation, the present value of the net revenue is
PV = $1278.85 million - $ 193.42 million + $ 6.08 million
PV = $ 1091.52 million
 Thus, the maximum amount of loan that can be raised is $ 727.68 million.

17. THANK YOU !!!