Availability of long-term finance for infrastructure projects challenge: Official

Availability of long-term finance for infrastructure projects in the country is a challenge, which calls for changes in financial regulation as such development initiatives have lengthy gestation periods, an official said on Wednesday. Speaking at a webinar organised by BCCI, state-run IIFCL Managing Director P R Jaishankar said, "Majority of funds for infrastructure used to come from banks. Presently, banks have been replaced by non-banking finance companies and infrastructure financing companies."

He said a change in mindset is needed to define standard assets as this will help in the long-term amortisation of funds deployed.

According to him, what is required is "the changes in financial regulation as infrastructure projects have long gestation periods".


Another aspect is relay financing from one entity to another, which will also help finance infrastructure projects in the country, Jaishankar said.

Other problems, which are non-financial in nature, are land acquisition, providing concessions and contract issues.

"Lenders are facing these problems. In all these aspects, reformative measures are needed," he said, adding that the Centre is pushing for development of infrastructure in the country.

He also said development financial institutions (DFIs) have a role to play in case of market failure, and they are needed to work within the existing framework.