IWAI permitted to raise funds again through bonds for development of National Waterways

July 20, 2017: The Union Cabinet chaired by Prime Minister Narendra Modi has approved the revalidation of permission to raise Extra Budgetary Resource (EBRs) of Rs. 660 crore as Government of India Bonds by Inland Waterways Authority of India (IWAI) in 2017-18.

The proceeds from the bonds will be utilized by IWAI for development and maintenance of National Waterways (NWs) under National Waterways Act, 2016 (effective from 12.4.2016). Funds received through issue of bonds will be used exclusively for capital expenditure to improve infrastructure funding.

The investment to be undertaken for development of NWs on identified projects in 2017-18 is estimated to be approximately Rs. 2412.50 crore and the government will finance principal and interest in respect of the EBRs. Interest will be paid semi-annually and the principal on maturity. The whole exercise would be undertaken by IWAI through appointment of lead managers and coordination with market regulator Sebi. Funds will be released in two tranches to get attractive yield from the borrowers. Apart from this, the World Bank has also sanctioned loans for plans like Jal Marg Vikas Project (JMVP).

In his budget speech for 2016-17, Finance Minister Arun Jaitley had said that to augment infrastructure funding further, government will permit mobilization of additional finances to the extent of Rs 31,300 crore by NHAI, RFC, REG, IREDA, NABARD and IWAI through raising bonds during 2016-17.

In accordance with this announcement, IWAI was allowed to issue infrastructure bonds worth Rs 1000 crore for the first time during 2016-17. As it was their maiden effort, they could succeed to raise Rs 340 crore on 01.03.2017 through e-bidding for development of inland waterways and shipping infrastructure during 2016-17 at coupon rate of 7.9 percent.