The India Infrastructure Finance Company (IIFCL) has said that it is increasing its takeout financing disbursement target by Rs 5,000 crore for this financial year.

The move comes following a change announced by the government to its scheme. The changes will benefit banks and infrastructure developers as it will bring attractive takeout financing deals for the firms.

The pricing for public-private-partnership projects will now be offered with takeout financing at the rate of 9.90% to 10.85%. The banks will be allowed to ask for takeout financing soon after the commercial operation date (COD).

S K Goel, the chairman and managing director, IIFCL said that earlier funding agencies were allowed to apply for takeout financing only one year after the COD but now the limitation will be removed for the highways sector.

“The build, operate and transfer (projects) as well as annuity-based projects of the National Highways Authority of India will be eligible for the scheme. Other infrastructure sectors can apply for the scheme six months after the COD,” he said.

The tenure of takeout financing will be 15 years and will also allow borrowers to propose for takeout financing. Earlier, only lenders were allowed to apply for takeout financing. It will allow banks to reduce exposure to existing borrowers and free up capital for meeting requirements. Infrastructure projects will be able to get low-cost long-term funds under the new regime.

IIFCL is now planning to float a Rs. 5,000 crore infrastructure debt fund with the help of private sector companies.