Higher Education Financing Agency (HEFA)

Q.  Which of the following is/are true regarding Higher Education Financing Agency (HEFA)?

1) HEFA would be formed as a SPV within a PSU Bank/ Government-owned-NBFC (Promoter).
2) HEFA would finance the civil and lab infrastructure projects through a 10-year loan.
- Published on 13 Sep 16

a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2

ANSWER: Both 1 and 2
 
  • The Union Cabinet, has approved the creation of the Higher Education Financing Agency (HEFA) to give a major push for creation of high quality infrastructure in premier educational institutions.
  • The HEFA would be formed as a SPV within a PSU Bank/ Government-owned-NBFC (Promoter).
  • It would leverage the equity to raise up to Rs. 20,000 crore for funding projects for infrastructure and development of world class Labs in IITs/IIMs/NITs and such other institutions.
  • The HEFA would also mobilise CSR funds from PSUs/Corporates, which would in turn be released for promoting research and innovation in these institutions on grant basis.
  • The HEFA would finance the civil and lab infrastructure projects through a 10-year loan. The principal portion of the loan will be repaid through the ‘internal accruals’ (earned through the fee receipts, research earnings etc.) of the institutions. The Government would service the interest portion through the regular Plan assistance.

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