IIFCL Seeks to Broaden Infrastructure Financing into Emerging and Sustainable Sectors

India Infrastructure Finance Corporation Limited (IIFCL) is in discussions with the government to expand the Harmonized Master List (HML) of infrastructure to include aircraft, commercial electric vehicles, and space infrastructure.

Inclusion in the HML would make these sectors eligible for long-term and concessional financing, access to external commercial borrowings, and funding from institutional investors such as insurance and pension funds.

The proposal is a strategic move to diversify infrastructure financing beyond traditional sectors like roads and power into sustainable and innovation-driven areas, including green mobility, sustainable aviation fuel, bio-CNG, green steel, green cement, and critical minerals.

Many of these emerging sectors are still at an early stage and may require structured financial support, such as credit enhancement, subordinated or mezzanine debt, and blended finance mechanisms, before becoming commercially bankable.

IIFCL is collaborating with international platforms such as the Coalition for Disaster Resilient Infrastructure, the International Solar Alliance, and the Global Biofuels Alliance to design innovative financing structures for sustainable infrastructure.

IIFCL has emphasized the need for greater participation by states and urban local bodies (ULBs) in infrastructure financing to broaden funding sources.

Suggested measures include fiscal incentives, FRBM-compliant financing products, use of subordinated or mezzanine debt structures, and deployment through mechanisms such as the Urban Challenge Fund.