Mumbai: The National Bank for Financing Infrastructure and Development (“Institution”) and the National Bank for Agriculture and Rural Development (“NABARD”) have signed a Memorandum of Understanding (MoU) to facilitate joint financing opportunities for rural infrastructure projects across India.
The collaboration aims to leverage NABARD’s extensive rural presence and the Institution’s infrastructure financing capabilities to develop scalable financing solutions for rural infrastructure projects.
Under the MoU, the two organisations will explore co-lending and consortium lending structures to enable long-term financing for rural infrastructure development.
The partnership will focus on a range of sectors and initiatives that are important to the development of rural infrastructure. Areas of cooperation include Public Private Partnership (PPP) projects and agri-value chains, as well as infrastructure with strong rural linkages.
These areas include water and sanitation, irrigation, post-harvest storage and cold-chain facilities, terminal markets, rural roads and bridges, warehousing and compressed biogas.
Through the partnership, NABARD and the National Bank for Financing Infrastructure and Development will also explore advisory support for rural infrastructure projects.
The advisory activities will cover project structuring, financial modelling and debt syndication.
The collaboration further includes joint capacity-building initiatives drawing on the training institutions of both organisations.
These initiatives are intended to complement the financing arrangements and support the development and execution of rural infrastructure initiatives.
NABARD Chairman on rural infrastructure collaboration
Dr Shaji Krishnan V., Chairman, NABARD, said: “Rural infrastructure itself has both social and commercial dimension. Our role has been to fund financially sustainable, market-based structures, and this partnership lets us work together on value-chain financing, capacity building through our respective training institutions, and on both the liability and asset sides of our business.
I am confident that this collaboration can help bridge the rural-urban divide and advance rural prosperity, which remains an important national priority. This MoU is a good starting point, and we look forward to working together towards that larger goal.”
The partnership between NABARD and the National Bank for Financing Infrastructure and Development will seek to expand financing opportunities for rural infrastructure projects by combining the capabilities and experience of the two institutions.
National Bank for Financing Infrastructure and Development MD on MoU
Rajkiran Rai G., Managing Director, National Bank for Financing Infrastructure and Development said, “This collaboration is a significant step towards strengthening rural infrastructure by aligning our infrastructure financing capabilities with NABARD’s deep understanding of rural development needs.
Our objective is to facilitate a greater flow of patient capital into rural infrastructure sectors that are vital for economic growth and inclusive social development.”
The MoU will allow the organisations to examine co-lending and consortium structures for financing rural infrastructure projects, while also creating opportunities for collaboration in project development and execution.
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Focus on financing and project development
Monika Kalia, Deputy Managing Director – CFO National Bank for Financing Infrastructure and Development added “By working closely with NABARD, we aim to leverage co-lending and consortium structures to support the rural infrastructure ecosystem.
Moreover, beyond financing, this collaboration is an also opportunity to strengthen rural infrastructure project development and execution through our advisory support and capacity-building initiatives.”
The cooperation covers financing structures as well as advisory and capacity-building support for rural infrastructure projects. The institutions will work together across areas including project structuring, financial modelling, debt syndication and capacity building.
The partnership brings together NABARD’s rural development expertise and presence with the infrastructure financing capabilities of the National Bank for Financing Infrastructure and Development.
The two organisations will explore financing structures and other forms of support aimed at strengthening the ecosystem for rural infrastructure projects across India.
