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IIFCL, LIC, IDFC sign MoU on takeout financing

IIFCL, LIC, IDFC sign MoU on takeout financing
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First Published: Sat, Sep 17 2011. 06 21 PM IST
Updated: Sat, Sep 17 2011. 06 21 PM IST
New Delhi: A memorandum of understanding (MoU) was signed on Saturday between IIFCL, LIC and IDFC with respect to the Takeout Finance Scheme (TFS).
Union finance minister Pranab Mukherjee, present during the occasion, said, “This Scheme (Takeout Finance Scheme) is aimed at removing the bottlenecks in infrastructure financing by addressing ALM, group exposure issues.”
Under the MoU, the project lender(s) will offer eligible infrastructure projects to IIFCL for availing takeout financing. And the takeout of debt upto 50% of the total project cost in the ratio of 20:20:10 by the three institutions respectively will be possible.
The TFS enables banks and lenders to avoid asset liability mismatch that may arise out of extending long term infrastructure loans.
Pranab said he expects this mechanism will help financing to the tune of Rs30,000 crore, adding this will facilitate banks to take more exposure in new projects, which in turn will help in bridging the gap in infrastructure financing.
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First Published: Sat, Sep 17 2011. 06 21 PM IST