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Informist, Thursday, Sept. 17, 2026

 

MUMBAI – India will need around INR 168 trillion-INR 172 trillion of investment in infrastructure over the next five to six years, with urban infrastructure expected to account for nearly half of the requirement, National Bank for Financing Infrastructure and Development Managing Director Rajkiran Rai G. said at a conclave here Thursday. "Urban infra comes on right on top," the managing director said, adding that the coming decade would belong to urban infrastructure. The scale of investment required would mean that spending on infrastructure needs to rise to around INR 30 trillion a year, roughly double the current level, he said.

 

The assessment comes as India looks to sustain economic growth while meeting rising infrastructure requirements. Rai said investment was currently outpacing domestic savings, making foreign capital an important source of financing.

 

Urban infrastructure would require significant initiatives, including developing suitable financing products and improving the ability of urban local bodies to borrow, he said. The renewable energy sector has also created a need for large investments in energy storage, particularly battery and pumped-storage projects, as India's renewable generation capacity has expanded to around 296 gigawatts from 82 gigawatts, with more than half of the country's energy coming from renewable sources, he said.

 

The next phase of infrastructure development is also expected to see greater private participation in railways through public-private partnership projects, while greenfield projects are likely to become increasingly important. Rai said India had undertaken substantial brownfield expansion and asset monetisation over the past decade, but the next phase would require greater focus on new greenfield infrastructure.

 

The infrastructure project pipeline is critical to meeting the investment requirement, he said. Around INR 90 trillion of projects have already been announced for the next five to six years, of which nearly INR 40 trillion are financially committed and moving forward, while the remainder are at various stages of approval. A further INR 80 trillion of projects are expected to be announced, he said.

 

Banks will continue to play a major role in financing infrastructure, while government capital expenditure will also remain an important source, the managing director said. He said there was limited scope for a significant increase in government capital expenditure and that state asset monetisation could potentially provide additional resources.

 

Rai said contractual and attrition-related issues also needed to be addressed to improve investor confidence. A guarantee policy announced by the government would be important in de-risking greenfield projects, he said. Transitional capital and viability-gap funding would also be necessary in sectors where commercial models were not yet fully developed.

 

The managing director said states were sitting on many operational assets that could potentially be monetised. The National Highways Authority of India has demonstrated how road assets can be monetised, and similar structures could be developed for state-level assets, he said. He also highlighted the potential of municipal bonds as a source of fresh capital, particularly as urban infrastructure requirements increase.

 

NABFID PRIORITIES

The MD said NabFID's priorities included building sustained financial infrastructure, increasing capital rotation, developing appropriate products and financing structures, and creating viable commercial models at different stages of infrastructure development. Improving market efficiency and information quality would also be critical, particularly for sectors such as urban infrastructure, he said. Rai also called for better alignment between government and regulatory guidelines to improve the functioning of infrastructure financing markets.

 

On NabFID's own operations, Rai said the institution had almost crossed INR 4 trillion in sanctions and was prepared to add around INR 1 trillion of sanctions annually. He described the institution's expansion as one of the fastest ramp-ups in the industry and highlighted its capabilities in project management, monitoring and policy advocacy.

 

The institution has also been working closely with regulators and government officials, he said. "We have a long way to go," the managing director said, adding that the next decade would see a major transition in India's infrastructure landscape.  End

 

Reported by Kabir Sharma

Edited by Shubhayan Bhattacharya

 

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