NaBFID & NABARD Partner for Rural Infrastructure Funding
By Business Desk
NaBFID and NABARD join forces via MoU to enhance rural infrastructure financing across India, focusing on scalable solutions for critical development projects.
The National Bank for Financing Infrastructure and Development (NaBFID) and the National Bank for Agriculture and Rural Development (NABARD) have signed a Memorandum of Understanding (MoU). This agreement aims to significantly boost rural infrastructure financing throughout India.
Strategic Collaboration for Rural Development
This strategic alliance combines NABARD’s extensive rural network with NaBFID’s specialized expertise in infrastructure financing. The goal is to develop scalable and effective financial solutions for critical rural development initiatives.
Under the MoU, both institutions will explore various lending models to provide long-term financial support. This includes co-lending and consortium lending structures for diverse rural infrastructure projects.
- Public-private partnership (PPP) projects
- Agri-value chains and related infrastructure
- Water and sanitation systems, alongside irrigation facilities
- Post-harvest storage, cold-chain infrastructure, and terminal markets
- Rural roads and bridges, warehousing solutions, and compressed biogas projects
Advisory and Capacity Building Initiatives
Beyond direct financing, the collaboration extends to offering crucial advisory support. This includes assistance with project structuring, financial modelling, and debt syndication efforts.
Furthermore, NaBFID and NABARD plan to utilize their respective training institutions. They will conduct joint capacity-building programs to strengthen project development and execution.
Dr. Shaji Krishnan V., Chairman of NABARD, emphasized the dual social and commercial aspects of rural infrastructure. He highlighted the importance of funding financially sustainable, market-based structures to bridge the rural-urban divide and advance rural prosperity.
Patient Capital for Essential Infrastructure
Rajkiran Rai G., Managing Director of NaBFID, stated this partnership marks a significant step. It aligns NaBFID’s financing expertise with NABARD’s profound understanding of rural development needs.
The primary objective is to facilitate a greater influx of ‘patient capital’ into rural infrastructure sectors. Such investments are vital for India’s economic growth and inclusive social development.
Monika Kalia, NaBFID’s Deputy Managing Director and CFO, reiterated that co-lending and consortium structures will be key mechanisms. She stressed the broader opportunity to enhance rural infrastructure project development and execution through advisory support.
NaBFID, established in April 2021, operates as a development financial institution. Its core mandate is to address the long-term financing requirements of India’s infrastructure sector.