SIDBI seeking consultants for NaBFID
Government expects the fund to raise up to Rs 3 lakh crore in the next few years
New Delhi: SIDBI on behalf of the government has floated Request for Proposal (RFP) inviting bids from consultants to help set up Rs 20,000 crore DFI called National Bank for Financing Infrastructure and Development (NaBFID) to catalyse investment in fund-starved infrastructure sector. The government expects the DFI to leverage this fund to raise up to Rs 3 lakh crore in the next few years.
Parliament in March cleared National Bank for Financing Infrastructure and Development (NaBFID) Bill 2021 to support the development of long-term non-recourse infrastructure financing in India, including the development of the bonds and derivatives markets necessary for infrastructure financing.
The objective of the assignment is to select a management consultant to support in the setting up of an infra Development Finance Institution (DFI), as an All-India Financial Institution (AIFI) to provide, enable and catalyse infrastructure financing, the RFP said.
The Infra DFI is being established through an Act of Parliament as a statutory body to address market failures that stem from the long-term, low margin and risky nature of infrastructure financing. The DFI would, therefore, have both developmental and financial objectives. To begin with, the institution will be 100 per cent government owned.
“Consultant would be required to help ensure successful launch of the newly formed Infra DFI. The work would require developing products related to infrastructure financing and to further enable private capital to invest in infrastructure projects. It also needs to be ensured that the Infra DFI has a clear strategy and governance process along with a clear road map of implementation,” it said. The DFI is expected to operate in a highly digital environment right from the start, it added.
Accordingly, the scope of work would cover articulating a design basis for the DFI in line with intent and content of the NaBFID Act, 2021 and support in developing an institutional building and business strategy, including a business model and operational plan. Besides, the consultant is expected to help in laying out operational workflows, metrics and dashboards for business processes and performance and assist in developing a technology strategy with a short or medium term road map.
This government-owned DFI will help fund about 7,000 infra projects under the National Infrastructure Pipeline (NIP) which envisages an investment of Rs 111 lakh crore by 2024-25. The DFI being set up to fund the infrastructure sector will remain outside the purview of CAG, CVC and CBI, a move aimed at enabling faster decision-making. Besides, the proposed law seeks to provide 10-year tax concession so that it can provide long-term funds at affordable cost to the infrastructure sector.
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