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New Delhi: The 'special purpose vehicle' to be set up in the next 4-6 weeks for funding infrastructure development will be able to leverage Rs20,000-30,000 crore of investment. This was stated by finance minister P Chidambaram in New Delhi on Saturday. "I have set aside Rs1,500 crore for viability gap funding. We hope to raise Rs10,000-crore lendable resources through this SPV," he said at ASSOCHAM post-budget meeting. "I think if all of us work together, we should be able to leverage investments of about Rs20,000-30,000 crore, which will be in addition to normal expansion of credit and investment," the minister said. Stressing that government alone cannot develop infrastructure, he said the SPV, announced in the union budget for 2005-06, would fund private and public sectors as well as joint ventures between the two. "I hope the SPV will be up and running in 4-6 weeks," he said, adding the banks would provide short-term loans up to five years, while the SPV would lend for 12-14 years. The projects would be appraised by an inter-institutional group of banks and financial institutions. The SPV will lend funds, especially debt of longer term maturity, directly to eligible projects to supplement other loans from banks and financial institutions. The government will communicate the borrowing limit to the SPV at the beginning of each fiscal. For 2005-06, the Finance Minister had fixed the borrowing limit at Rs10,000 crore. He said the government saw potential for investments in road, seaports, airports and tourism sectors and if India Inc had any sectors to specify, the centre was more than willing to accommodate those views.
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