SREI Infra signs LoI with FMO of Netherlands

KOLKATA: London Stock Exchange-listed SREI Infrastructure Finance has signed a letter of intent (LoI) with FMO of Netherlands to secure external commercial borrowing of $100 million (Rs 500 crore approx). The loan amount will be used to help grow SREI���s infrastructure project finance as well as equipment financing business.

Speaking to mediapersons at a meeting held in Kolkata on Monday, SREI Infrastructure Finance chairman & managing director Hemant Kanoria said: "A large number of international institutions and banks have confidence in the company���s infrastructure business. They are willing to provide long term loans to SREI despite the global financial crisis."

While FMO has syndicated the loan as the lead lender, DEG of Germany and Proparco of France were also part of the consortium. SREI Infrastructure Finance will be able to procure the loan only after obtaining Reserve Bank of India (RBI) approval.

Elaborating, Mr Kanoria said, it is impossible to raise long term debt from the domestic market at the moment. "We have urged RBI to relax some of the clauses for overseas borrowing by non-banking finance companies (NBFCs)," he added.

Currently, NBFCs are allowed to borrow from multilateral and bilateral funding institutions and not banks.