Deputy Governor of Reserve Bank of India Usha Thorat said the Central Government had decided that India Infrastructure Finance Company Limited (IIFCL) would refinance 60 per cent of commercial bank loans for public-private partnership (PPP) projects in critical areas in the next 15-18 months.

This was done to ease the financing constraints for infrastructure projects under the PPP mode. IIFCL was a special purpose vehicle set up to provide long-term financial assistance to stimulate public investment in infrastructure.

Delivering the keynote address at a conclave organised by the Institute of Public Enterprise for chief executive officers (CEOs) and chief financial officers (CFOs) of industry here on Friday, Ms. Thorat said the IIFCL had been authorised to raise Rs. 10,000 crore through government-guaranteed tax-free bonds by the end of 2008-09 and an additional Rs. 30,000 crore on the same basis as per requirement in 2009-10.

The refinancing option with IIFCL now was expected to leverage bank financing for PPP programmes to the extent of about Rs. 1 lakh crore.

The Deputy Governor felt that ‘take out financing’, a long-term permanent financing, was one way of addressing the asset-liability mismatch (ALM).

Ms. Thorat also said that the RBI was preparing guidelines to allow repos in corporate bonds and they would be put on the bank’s website soon.

Chairman and Managing Director of National Mineral Development Corporation Rana Som said the job of CEOs was much more challenging now though their path was well defined than in the past.

The meeting was also addressed by Chairman of State unit of Confederation of Indian Industry Y. Harishchandra Prasad.

More In: Economy | Business