By IANS,
New Delhi : The Cabinet Thursday approved the Model Tripartite Agreement for early operationalisation of the Infrastructure Debt Funds (IDFs) easing flow of long-term capital for infrastructure projects.
Infrastructure Debt Funds (IDFs) were announced in the 2011-12 budget.
Working as a catalyst to channelise domestic savings, IDFs would also provide a vehicle for refinancing the existing debt of infrastructure projects, which are funded mostly by commercial banks.
An IDF can be structured either as a company or as a trust. Whereas as a trust, it would be regulated by SEBI under the mutual fund regulations. As a company, the IDF would be structured as a non-banking finance company (NBFC) under the RBI.
An IDF-NBFC would issue either rupee or dollar denominated bonds and invest only in debt securities of public-private partnership projects which have a buy-out guarantee and have completed at least one year of commercial operations.
The cabinet also approved the constitution of an empowered inter-ministerial group to approve sector-specific or project-specific modifications.