Current Affairs · Infrastructure Financing
A large Indian conglomerate is planning to develop a 'Multi-Modal Logistics Park' (MMLP) under the PM Gati Shakti National Master Plan. The project requires an initial investment of 2,500 Crore with a long gestation period. The conglomerate approaches commercial banks, but they face Asset-Liability Management (ALM) constraints. In this context, how could NaBFID and SIDBI potentially collaborate to support this infrastructure ecosystem?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1NaBFID would provide a 25-year long-term loan at a fixed rate for the main infrastructure, while SIDBI would provide refinance to commercial banks for the MSME vendors working on the project site.✓
- 2NaBFID would buy the equity of the conglomerate to take over management, while SIDBI would issue a 'Credit Default Swap' to the banks to cover 100 percent of the construction risk.
- 3Both institutions would merge to form a single entity to lend the money, as regulations prohibit two different DFIs from financing the same logistics park.
- 4SIDBI would provide the main project loan, and NaBFID would only act as a 'Consultant' for the environmental impact assessment without providing any capital.
Correct answer
NaBFID would provide a 25-year long-term loan at a fixed rate for the main infrastructure, while SIDBI would provide refinance to commercial banks for the MSME vendors working on the project site.
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