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Concessional Financing Scheme
August 2 , 2018
2333 days
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- Union Cabinet has approved first extension of Concessional Financing Scheme (CFS) for another five years from 2018 to 2023
- The move comes in a bid to support Indian Entities bidding for strategically important infrastructure projects abroad.
- The scheme also has been liberalized, allowing any Indian company, irrespective of ownership eligible to benefits of it.
- Under CFS, Ministry of External Affairs (MEA) selects specific projects keeping in view strategic interest of India and sends same to Department of Economic Affairs (DEA).
- The strategic importance of project to deserve financing is decided on case to case basis, by Committee chaired by Secretary, DEA
- Deputy National Security Adviser (Dy NSA) is also a member of this Committee.
- The Scheme is presently being operated through EXIM Bank, which raises resources from market to provide concessional finance.
- Union Government provides counter guarantee and interest equalization support of 2% to EXIM Bank
- EXIM Bank can extend credit at rate not exceeding LIBOR (avg. of six months) + 100 bps. The repayment of loan is guaranteed by foreign government.
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