Naidu giving final touches to new financing model for Amaravati
The Andhra Pradesh Chief Minister Mr N Chandrababu Naidu is giving final touches to an innovative financing model for construction of the capital city of Amravati.
One of the new options that he is working on is to set up a corpus similar to the Collective Investment Fund (CIF) that supported the development of the Gujarat International Finance Tec-City (GIFT) between Ahmedabad and Gandhinagar.
CIF was a mechanism in which individual investors could buy units linked to assets in the same way as mutual funds. Another option being mulled is raising a fund from governments across the world through strategic tie-ups.
It is proposed to be structured as the National Investment and Infrastructure Fund (NIIF).
This is apart from other traditional fund raising options, including the relatively newer debt instrument of masala bonds, sovereign funds and NRI funds.
Taking stock of these and other funding plans for Amaravati which costs an estimated Rs.32,000 crore at a review meeting, Mr Naidu ordered that a detailed blueprint for tapping both the national and international financial markets like London and Hong Kong should be prepared.
Another focus area which was to generate adequate housing stock through Lease Rental Discounting (LRD) method was being examined. Under the LRD system, the future lease rentals from the housing stock created would be securitised to approach relevant funding agencies for seeking upfront funding.
Mr. Naidu also advised the officials to consider debt swapping method that would reduce the average cost of capital.
He instructed the CRDA officials to reach out to global players who would enable Amaravati to become a vibrant sports city.