Model Tripartite Agreement for IDF approved
The Cabinet Committee on Infrastructure (CCI) approved the Model Tripartite Agreement for IDFs. The CCI also approved the constitution of empowered Inter-Ministerial Group to approve sector-specific or project-specific modifications. This Model Tripartite Agreement will help in early rollout of IDFs in the country.
IDFs were announced in the Union Budget for 2011-12 to accelerate and enhance the flow of long-term debt for funding infrastructure projects.
An IDF can be structured either as a company or as a trust. If set up as a trust, it would be regulated by SEBI under the Mutual Fund Regulations. If set up as a company, the IDF would be structured as a Non-Banking Finance Company (NBFC) and will be under the regulatory oversight of RBI. Guidelines with enabling provisions have already been issued by the Reserve Bank of India and SEBI. An IDF-NBFC would issue either rupee or dollar denominated bonds and invest only in debt securities of Public Private Partnership projects which have a buy-out guarantee and have completed at least one year of commercial operations.
Regulations issued by RBI provide that a Tripartite Agreement, which shall be binding on all the parties thereto, will be entered into between the Concessionaire, the Project Authority and the IDF.