To accelerate the flow of long-term funds into various projects in areas such as power, roads and ports, the Union Finance Ministry may put in place within a month the modalities for a new structure of the Infrastructure Trust Fund, the Ministry stated.
The proposed fund is expected in the nature of REIT (Real Estate Investment Trust), which are prevalent in many countries like Singapore, Hong Kong and USA. Under the structure, underlying revenue of projects will be transferred to a trust and the trust will then issue units to investors, including foreign investors who then want to buy the units.
The government has been looking at various options to help fund the infrastructure sector which is estimated to require around $1 trillion investment by 2017. Recently, India Infrastructure Finance Company (IIFCL) launched its first Infrastructure Debt Fund (IDF) with targeted initial corpus of $1 billion.