2 weeks ago
NaBFID plans $3-4 billion overseas borrowing under RBI hedging window
NaBFID is a special bank in India that helps build big things like roads, ports, and power plants.
It wants to borrow money from other countries to pay for these projects.
The Reserve Bank of India said it will help make foreign borrowing cheaper by paying part of the cost of swapping dollars for rupees.
Because of this, NaBFID raised its plan from 1-2 billion dollars to 3-4 billion dollars.
It has already borrowed 850 million dollars through a loan.
Next, it plans to sell bonds worth between half a billion and one billion dollars.
It is also close to signing another loan of about one billion dollars.
NaBFID is helping companies that owe money in dollars to switch to rupees, which are easier to repay.
It even wants to start a fund that invests in companies, to be based in a place called GIFT City.
All of this is meant to help India build better infrastructure.
NaBFID plans to raise $3-4 billion through external commercial borrowings, up from an earlier target of $1-2 billion.
The RBI's concessional forex swap facility, announced on 5 June, runs until 31 December 2026 and bears a fixed swap cost of 1.5% a year.
NaBFID has raised $850 million via a term loan at SOFR plus 120 basis points and is planning a $500 million-$1 billion bond issue.
The lender is working on a roughly $1 billion long-term ECB loan backed by a multilateral agency, expected to be completed by October.
NaBFID is helping infrastructure companies refinance dollar debt with rupee funding and plans a $500 million equity fund via an AIF subsidiary in GIFT City.
- Who
- NaBFID (National Bank for Financing Infrastructure and Development), led by managing director Rajkiran Rai G, with the Reserve Bank of India (RBI) providing a concessional hedging window.
- What
- NaBFID plans to raise $3-4 billion through external commercial borrowings under the RBI's concessional forex swap facility.
- Where
- India, with the announcement made in Mumbai and an AIF subsidiary planned in GIFT City.
- When
- Announced on Wednesday at the FIBAC 2026 conference; the RBI scheme runs until 31 December 2026 and the bond issue could launch by the end of September.
- Why
- To lower the cost of overseas borrowing and fund infrastructure development, aided by the RBI bearing a fixed swap cost of 1.5% a year.
Key facts
- Lender
- National Bank for Financing Infrastructure and Development (NaBFID)
- ECB target
- $3-4 billion (up from $1-2 billion)
- RBI swap cost borne
- 1.5% per year
- Scheme deadline
- 31 December 2026
- Term loan raised
- $850 million at SOFR plus 120 basis points
- Planned bond issue
- $500 million-$1 billion, ~10-year maturity
- Multilateral-backed loan
- ~$1 billion, 10-15 year tenor, expected by October
- Borrowings as of end June
- ₹1.2 trillion (50% non-convertible debentures, 42% bank lines)
- GIFT City equity fund
- $500 million, operations expected by December or end of FY27
Quotes
Rajkiran Rai G
Managing Director of NaBFID
“We are looking at about $3-4 billion of ECBs, including both loans and bonds. There is a plan”
livemint.com
“We are looking at slightly longer, not five years, maybe ideally something around 10-year”
livemint.com
Sources
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