Funding would be used expand facility to all institutions, especially to ones that were set up after 2014, central universities that have very little internal resources & school education⟋health education infrastructure like AIIMS, Kendriya Vidyalayas.
5 Windows for Financing under HEFA & Modalities of Repaying Principal
CCEA has approved 5 windows for financing under HEFA & modalities of repaying Principal portion of fund:
Technical Institutions more than 10 years old: Institutions will have to repay whole Principal Portion from internally generated budgetary resources.
Technical Institutions started b⟋w 2008 & 2014: Institutions will be required to repay 25% of principal portion from internal resources & receive grant for balance of Principal portion.
Central Universities started prior to 2014: They will have to repay 10% of principal portion from internal resources & receive grant for balance of Principal portion.
Newly established Institutions started after 2014: For funding construction of permanent campuses, grant would be provided to these institutions for complete servicing of loan including Principal & interest.
Other educational institutions & grant-in-aid institutions of Ministry of Health: All newly set up AIIMS & other health institutions, Kendriya Vidyalayas⟋Navodaya Vidyalayas would be funded & Department⟋Ministry concerned will give commitment for complete servicing of principal & interest by ensuring adequate grants to institution.
CCEA permitted HEFA to mobilise ₹ 1,00, 000 cr. over next 4 years till 2022 to meet infrastructure needs of these institutions.
Cabinet approved increasing authorised share capital of HEFA to ₹ 10,000 cr.
It approved infusing additional Govt. equity of ₹ 5,000 cr. (in addition to ₹ 1,000 cr. already provided) in HEFA.
It has approved that modalities for raising money from market thru Govt. guaranteed bonds & commercial borrowings would be decided in consultation w⟋Department of Economic Affairs so that funds are mobilised at least cost.
Significance of the Additional Funding
Move would enable addressing needs of all educational institutions w⟋differing financial capacity in inclusive manner.
It would enable HEFA to leverage additional resources from market to supplement equity, to be deployed to fund requirements of institutions.
Govt. guarantee would eliminate risk factor in bonds issue & attract investment into this important national activity.
HEFA - Higher Education Financing Agency
HEFA was set up on 31st May, 2018 by Central Govt. as non-profit, Non-Banking Financing Company (NBFC) for mobilising extra-budgetary resources for building crucial infrastructure in higher educational institutions under central govt.
Entire principle portion is repaid by institution over 10 years & interest portion is serviced by Govt. by providing additional grants to institution.
Funding proposals worth ₹ 2,016 cr. are approved by HEFA.