IIFCL to become sole lender to road developers

The Union Finance Ministry’s decision to permit India Infrastructure Finance Corporation (IIFCL) to become the sole lender even at a pre-bid stage has been welcomed by road developers. However, the road developers stated that the exact impact will come to known only after the finer details emerge. The very fact that IIFCL can become the sole lender is a good decision. One of the key points is the project developer would not have to go to multiple banks. Right now, for projects valued at Rs 3,000 crore or so, project developers have to go to 12-15 banks as there are exposure limits of Rs 200-250 crore for each firm, except if you go through State Bank of India, IL&FS Transportation Networks stated. Even the NHAI has welcomed the government's move. It said that IIFCL becoming involved at a pre-bid level is good. If it gets involved with the project sponsor, such as NHAI for road projects and Port Trusts for port projects, then there will be a layer of banker’s assessment of a project, even before the project goes out for bid. This is likely to solve the current problem of gaps between bankers’ assessment of a project and NHAI’s assessment, a NHAI official said.