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Traditionally, government has been the sole financier for all infrastructure projects along with the responsibility for implementing projects, operations and their maintenance. Then due to raising needs of infrastructure finance it became recognizable that this method is not enough, neither the best way to execute/finance such mega projects.
Then the government took several attempts for creating an environment for the private players in infrastructure development sector within the country. Generally, infrastructure finance has to be for the infrastructure project which depends on manufacturing projects, expansion and modernization projects that are carried out by infrastructure undertakings in India. Infrastructure finance is considered to be highly capital intensive and entails longer maturity along with higher risk and prolonged real rate of returns.
Banks and Financial Institutions (FIs) are considered to be open for financing technically feasible, financially viable and bankable projects which are undertaken by public as well as private sector undertakings.
However, before getting finance, it is pre-requisite to take relevant measures as follows:
The supply of funds does not seem to be in short supply for infrastructure finance; there exists a need for an extra layer of credit enhancement that can absorb the associated risks with infrastructure financing. It also gives rise to situations for involving intermediaries, instruments and markets which can perform risk functions effectively, maturity and duration transforming to suit the desires of the investors.
Equity funds
Debt funds
Equity funds
Debt funds
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