ECONOMIC AFFAIRS

Union Cabinet approves establishment of Higher Education Financing Agency The Union Cabinet on 12 September 2016 approved the creation of the Higher Education Financing Agency (HEFA). The HEFA will be established to give a major push for creation of high quality infrastructure in premier educational institutions. Key highlights of the HEFA • The HEFA will be jointly promoted by the identified Promoter and the Ministry of Human Resource Development (MHRD) with an authorised capital of 2000 crore rupees. The Government equity will be 1000 crore rupees. • The HEFA will be formed as a SPV within a PSU Bank/ Government-owned-NBFC.  It will leverage the equity to rise up to 20000 crore rupees for funding projects for infrastructure and development of world class Labs in IITs/IIMs/NITs and such other institutions.  • It will also mobilise CSR funds from PSUs/Corporates, which will in turn be released for promoting research and innovation in these institutions on grant basis. • The HEFA will finance the civil and lab infrastructure projects through a 10-year loan. • All the Centrally Funded Higher Educational Institutions will 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 will be securitised by the HEFA for mobilising the funds from the market. • Each member institution will be eligible for a credit limit as decided by HEFA based on the amount agreed to be escrowed from the internal accruals.