Infrastructure Project Financing
NIFRA offers a variety of loan products that aims to cater to the financial requirement of projects across various infrastructure domains. Presently, NIFRA issues long-term loans for developing projects across various infrastructure sector (as per NRB directives) with a repayment tenure of 5-15+ years. NIFRA extends long-term loans at market-competitive interest rate.
Further, NIFRA provides fund based and non-fund based short term credit facilities to the projects banking with it. Under fund-based credit facilities, the bank provides working capital loans, short term loans, bridge gap loan, demand loan, contractor loan, auto/ equipment loan etc. to infrastructure projects. While non-fund-based facilities include Bid Bond, Performance Bond, advance payment guarantee, financial guarantee, counter guarantee, letter of credit (import and export), etc.
Additionally, NIFRA is looking into financing municipality infrastructure projects like waste management, urban infrastructure, etc. under private sector participation (PSP). NIFRA has signed a Memorandum of Understanding with Province 1 government and is seeking to collaborate with other provinces of Nepal for developing such infrastructure projects.
Investment in Shares, Debt & Hybrid Instrument
NIFRA has well formulated “Policy for Investment in Shares, Debt & Hybrid Instrument of Infrastructure Projects” and works for establishment, expansion and smooth operation of projects that generate beneficial social or environmental impacts in addition to financial gains. Being pioneer infrastructure development bank of the country NIFRA is playing active role in development of various innovative models of infrastructure project development as an equity and/or quasi equity investor in addition to the debt financing. To create more such impact investing activities with the limited resources, NIFRA invests equity in projects with exit strategy after its successful execution/ implementation.
NIFRA will not prefer to become the largest/single shareholder of any potential entity in which it invests by limiting its investment to not more than 20% of total equity of the said entity. Nevertheless, the limit of shareholding in the initial phase of the projects being taken-up by NIFRA itself shall not be limited to 20%. The investment in those entity shall be made on a presumption that NIFRA has the ability to exercise significant influence over the operating and financial policies of an investee.
INFRA Excellence Center
NIFRA is in the process of establishing an ‘INFRA Excellence Center’ membered by its own internal specialized team collaborating with the empaneled outsourced team of experts in the relative infra-domain having proven competency in PPP/PSP financial modelling. The center shall act as Nodal Agency within NIFRA to establish a strong relationship with relevant Government institutions in the country. The team shall liaise with these institutions in activities such as:
Financial Resources Collection
As per the directives of Nepal Rastra Bank (NRB) - the central bank of Nepal – issued to Infrastructure Development Banks, NIFRA is allowed to collect the following types of deposits only:
Subha Purbadhar Khata (Individual/Institutional)
In line with the prevailing regulation, NIFRA offers the Subha Purbadhar Khata at the market competitive interest rate.
Innovative Structured Products
Sourcing through innovative structures of Debt instruments/Funds onshore and offshore are major activities which NIFRA has initiated. Few of the activities initiated include: