Govt may give nod for IDF to raise $2bn via ECBs

The government has been holding wide ranging consultations on setting up the infrastructure debt fund or IDF. We have been telling you the contours of the fund as they emerge. CNBC-TV18's Aakansha Sethi now learns that the ECB policy will be reviewed for the IDF.

One of the key objectives of infrastructure debt fund will be to attract deep pools of liquid capital internationally and invest it in the infrastructure sector in India. To this end, the ECB policy for IDFs will be specially reviewed. We learn that the overall limit for easing ECBs for the IDF will be USD 2 billion.
For corporates, currently, this limit is only at USD 500 million annually. Also, the pools of funds that IDF will be allowed to tap into will be extended so pension funds, insurance companies, multilateral institutions, such as Asian Development Bank (ADB) and the World Bank, and also HNIs will be allowed to lend to the IDF, which is currently not allowed under the ECB policy.
The IDF will be allowed to on lend to infrastructure projects in India. These will be PPP projects. This is again something that is currently not allowed under the current ECB policy.
However, only SEBI registered FIIs will be allowed to invest in the bonds that will be issued by the IDF when it is structured as a company.
Remember, the sponsors will have both the options