NaBFID eyes tieups with multilateral funding agencies

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By Last Updated: Feb 06, 2025, 11:53:00 PM IST

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The National Bank for Financing Infrastructure and Development (NaBFID) plans to partner with multilateral funding agencies for blended finance to boost sustainable urban infrastructure development in India. NaBFID will also explore municipal finance structures and PPP investment frameworks, moving Rs 30,000 crore from banks and NBFCs to the bond market.

New Delhi: The National Bank for Financing Infrastructure and Development (NaBFID) is looking to forge partnerships with multilateral funding agencies for blended finance to develop urban infrastructure and finance sustainable projects of urban local bodies, financial services secretary M Nagaraju said Thursday.

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Blended finance refers to the use of catalytic capital from public or philanthropic sources to increase private sector investment in sustainable development projects. It brings down the cost of funds and thus is available for sustainable projects at a cheaper cost than traditional funds.

"NaBFID will collaborate with multilateral banks, World Bank, ADB and others, particularly those focused on green funds, to provide blended financing structure in India," Nagaraju said, addressing a workshop organised by NaBFID.

State-owned NaBFID can also explore the pool finance structures for municipal finances that could aid raising resources for urban infrastructure. It can also help in designing PPP investable structures through its transaction advisory services, he said.

NaBFID, set up in 2021, is a specialised development finance institution aimed at supporting India's infrastructure sector.

NaBFID managing director Rajkiran Rai G said there is an opportunity to move around Rs 30,000 crore of infrastructure financing done by banks and non-banking financial companies (NBFCs) into the bond market.

"Ultimately completed projects and operational assets with stability and cash flow will all move to the bond market in the long run because there is a benefit, and that is where the credit enhancement also will come," he said.

Finance minister Nirmala Sitharaman had in her budget speech announced that NaBFID will set up a partial credit enhancement facility for corporate bonds in the infrastructure sector.

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