SIDBI is looking for bids from coordinators to help set up Rs 20,000 cr NaBFID

The government expects DFI to use the fund to reach Rs 3 lakh crore in the next few years.
SIDBI, instead of the government, has rejected a Request for Proposal (RFP) application inviting bids from donors to help establish a RS 20,000 crore DFI called the National Bank for Financing Infrastructure and Development (NaBFID) to encourage investment in the famine-stricken infrastructure sector.

Parliament in March unveiled the National Investment and Infrastructure Bank (NaBFID) Annual Bill 2021 to fund the provision of non-refundable short-term financing in India, including the creation of bonds and available markets required for infrastructure funding.

This task aims to select a management coordinator who will support establishing an infra Development Finance Institution (DFI), such as the All-India Financial Institution (AIFI), to provide, empower, and promote infrastructure funding, the RFP said.

Infra DFI is established by an Act of Parliament as the official body to address market failures arising from the long-term, underlying crisis and financial risk of infrastructure. DFI will therefore have both developmental and financial objectives. First, the centre will be 100 per cent state.

"The coordinator will be required to assist in ensuring the successful launch of the newly established Infra DFI. The project will need innovative products related to infrastructure funding and private funds to invest in infrastructure projects. "he said.

DFI is expected to operate in a digital environment from scratch, he added.

Accordingly, the scope of work will include presenting the basis for DFI design in line with the purpose and content of the NaBFID Act, 2021 and support for developing the business plan and business plan, including business model and application.

In addition, the consultant is expected to assist in setting operational flow, metrics and dashboards for business processes and operations and assist in developing a technology strategy with a short-term or medium-term road map.

The state-owned DFI will help fund approximately 7,000 infra projects under the National Infrastructure Pipeline (NIP), which is expected to invest? 111 lakh crore in 2024-25.

The DFI set up to fund the infrastructure sector will remain outside the CAG, CVC, and CBI, which will empower decision-making quickly.

In addition, the proposed legislation aims to provide for a 10-year tax concession to provide long-term funding at an affordable cost to the infrastructure sector.

The government expects DFI to use the fund to reach Rs 3 lakh crore in the next few years.

In the pre-independence era, India had DFIs that were heavily involved in the development of the industry.

ICICI furthermore IDBI, in their early avatars, were DFIs. Even the oldest financial institution in the country, IFCI Ltd, operates as a DFI.

In India, the first DFI came into operation in 1948 with the Industrial Finance Corporation of India (IFCI).

Consequently, the Industrial Credit furthermore Investment Corporation of India (ICICI) was built with the support of the World Bank in 1955.

The IDBI remained organised in 1964 to develop long-term funding for infrastructure and industry projects.

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