Govt to finalise plans for infra trust fund in a month
New Delhi: The Finance Ministry is likely to put in place within within a month the modalities for a new structure, Infrastructure Trust Fund, to accelerate the flow of long-term funds into various projects in areas such as power, roads and ports.
"We are at the moment working on a new structure called Infrastructure Trust Fund. We will finalise its modalities within one month," said a senior official at the ministry.
He said the fund is expected "in the nature of REIT (Real Estate Investment Trust), which are prevalent in many countries like Singapore, Hong Kong and USA".
The official added: "Under the structure, underlying revenue of projects will be transferred to a trust and the trust will then issue units to investors, including foreign investors who then want to buy the units."
The government has been looking at various options to help fund the infrastructure sector which is estimated to require around USD 1 trillion investment by 2017.
Recently, India Infrastructure Finance Company Ltd (IIFCL) launched its first Infrastructure Debt Fund (IDF) with targeted initial corpus of USD 1 billion.
The IDF, which was proposed in the Union Budget for 2011-12 fiscal, is aimed at accelerating and enhancing flow of long term debt for funding the ambitious programme of infrastructure development in the country.
Finance Minister P Chidambaram had recently said in Washington that the total investment requirements for power, roads, ports, civil aviation and so on during the 12th Plan period (2012-17) is projected at USD 1 trillion, nearly half of which is expected to come from the private sector.
Chidambaram had said that there is a huge opportunity for foreign investment in India as the government focuses on rapid infrastructure development in the country.