Higher Education Financing Agency (HEFA)

In order to give a big push for building up robust higher educational institutions, the Cabinet has approved creation of the Higher Education Financing Agency (HEFA) with Government equity of Rs. 1,000 Cr.

• The creation of HEFA will enable major investments for creation of high quality infrastructure in premier educational institutions. The HEFA would be formed as an SPV within a PSU Bank/Government-owned-NBFC (Promoter). It would leverage the equity to raise up to Rs. 20,000 Cr for funding projects for infrastructure and development of world class Labs in IITs/IIMs/NITs and such other institutions.
• The HEFA would finance the academic and research infrastructure projects through a 10-yr loan. The principal portion of the loan will be repaid through the ‘internal accruals’ of the institutions. The Government would service the interest portion through the regular grant assistance.
• All the Centrally Funded Higher Educational Institutions would be eligible for joining as members of the HEFA. For joining as members, the Institution should agree to escrow a specific amount from their internal accruals to HEFA for a period of 10 years. This secured future flows would be securitised by the HEFA for mobilising the funds from the market. Each member institution would be eligible for a credit limit as decided by HEFA based on the amount agreed to be escrowed from the internal accruals.
• The HEFA would be jointly promoted by the identified Joint Promoter, Canara Bank  and the Ministry of Human Resource Development (MHRD) with an authorized capital of Rs.2,000 crore. The Government equity would be Rs.1, 000 crore.
• The HEFA would also mobilize CSR funds from PSUs/Corporates, which would in turn be released for promoting research and innovation in these institutions on grant basis.

Canara Bank was identified and appointed as Joint Venture partner.