NABARD, NaBFID Join Hands to Fund Rural Infrastructure Projects

The National Bank for Agriculture and Rural Development (NABARD) and the National Bank for Financing Infrastructure and Development (NaBFID) have signed a Memorandum of Understanding (MoU) to strengthen financing for infrastructure projects with significant rural impact.

The partnership seeks to combine NABARD’s expertise in agriculture and rural infrastructure with NaBFID’s specialised capabilities in long-term infrastructure financing. The collaboration will focus on improving access to competitively priced, long-term finance for commercially viable projects that can strengthen rural infrastructure and agricultural value chains.

Under the MoU, the two institutions will explore joint financing arrangements and infrastructure advisory services throughout the project lifecycle. This will cover project identification, appraisal and due diligence, credit structuring and pricing, and joint monitoring.

They will also work together on project structuring, financial modelling and debt syndication. Joint capacity-building programmes will be undertaken through the respective training institutions of NABARD and NaBFID to facilitate knowledge sharing and strengthen expertise in infrastructure financing.

The partnership will cover Public Private Partnership (PPP) projects, agri-value chains and infrastructure with strong rural linkages. Key areas identified for collaboration include irrigation, water and sanitation, post-harvest storage, cold-chain facilities, terminal markets, rural roads and bridges, warehousing and compressed biogas.

NABARD Chairman Dr Shaji Krishnan V. said rural infrastructure has both social and commercial dimensions and stressed the importance of financially sustainable, market-based structures. He said the partnership could help bridge the rural-urban divide and advance rural prosperity.

NaBFID Managing Director Rajkiran Rai G said rural infrastructure is emerging as an important driver of economic growth. He highlighted opportunities to develop commercially viable and bankable projects in areas such as food processing, storage and cold-chain connectivity, which can contribute to higher farmer incomes and strengthen the rural economy.

The collaboration is expected to increase the availability of long-term financing for rural infrastructure and allied value chains, while improving connectivity and market access. By combining their institutional strengths, NABARD and NaBFID aim to support sustainable rural development and contribute to narrowing the rural-urban divide.