The transport minister Nitin Gadkari has finally managed to secure ₹25,000 crore for financing road and highway projects from State Bank of India (SBI). This is a welcome happening in times when bank lending to road infrastructure had almost dried up forcing the minister to reach out to banks to get them back to resume funding the sector. The funds have been cleared to the National Highways Authority of India (NHAI), the largest ever funding arranged for the nodal road building agency in a single tranche, marking a resumption of flow of bank funds to the infrastructure sector. The SBI loan commands 7.99% rate of interest for 10 years with a moratorium of three years for repayment of the principal. The memorandum of understanding would be signed between SBI and the NHAI shortly. It is the highest ever project loan sanctioned by the bank without any upfront fee or any direct or indirect charges thereon, except bare rate of interest. Apart from this, ten other banks also evinced interest on the expression of interest floated by NHAI. The reason for getting such good interest rate is because all highway projects are extremely secured and the toll collection is seeing an annual increase of around 10%, said a senior official.
