The Reserve Bank of India has allowed holding and core investment companies to generate resources through the external commercial borrowing (ECB) route for investment in special purpose vehicles (SPVs) established exclusively for developing road infrastructure projects. As per the RBI norms, the ECB proceeds have to be invested either for fresh capital expenditure (capex) or for refinancing of existing rupee loans taken from the domestic banking system for capex. Further, no other method of funding, such as trade credit, can be used for the portion of fresh capital expenditure financed through ECB proceeds.
