The National Bank for Agriculture and Rural Development (Nabard) and the National Bank for Financing Infrastructure and Development (NaBFID) signed a memorandum of understanding in Mumbai on 26 August to collaborate on financing infrastructure projects with significant rural impact. The agreement sets out a framework for joint action to expand long-term financing and improve market access for rural enterprises. The institutions intend to leverage complementary mandates to address gaps in rural infrastructure funding.

The partnership will combine Nabard's expertise in agricultural and rural infrastructure with NaBFID's skills in large-scale infrastructure financing. The two institutions will explore joint financing, knowledge sharing and new financing solutions aimed at improving access to long-term and competitively priced finance for projects with rural linkages. They will focus on creating commercially viable structures that can attract private capital.

The collaboration will cover project identification, appraisal and due diligence, credit structuring and pricing, and joint monitoring of funded projects. The institutions plan to work on project structuring, financial modelling and debt syndication to enhance bankability. Joint monitoring and periodic reviews are intended to improve project outcomes and mitigate execution risks.

The MoU encompasses public-private partnership projects, agri-value chains and a range of rural infrastructure sectors. Areas identified include water and sanitation, irrigation, post-harvest storage, cold-chain facilities, terminal markets, rural roads and bridges, warehousing and compressed biogas. Emphasis is on infrastructure that supports connectivity, storage and market access for farmers and small enterprises.

The Nabard chairman Shaji Krishnan said the partnership could support value-chain financing and help bridge the rural-urban divide, while NaBFID managing director Rajkiran Rai G said the institutions could develop commercially viable projects in food processing, storage and cold-chain connectivity. The agreement also foresees joint capacity-building initiatives using the training institutions of Nabard and NaBFID to strengthen capabilities in infrastructure financing. The institutions stated the collaboration aims to increase the availability of long-term finance for rural infrastructure and allied value chains and thereby contribute to higher rural incomes.