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Features of Project Loans by State Bank of India (SBI)

  • Comprehensive Financial Solutions: SBI provides a bouquet of structured financial solutions, including:
    • Term Loans: For funding long-term project costs.
    • External Commercial Borrowings (ECB)/Foreign Currency Term Loans (FCTL): For projects requiring foreign currency financing.
    • Non-Fund Based Facilities: Such as Bank Guarantees and Letters of Credit for equipment financing (domestic and imported).
    Support from SBI’s vast treasury, International Division, SBI Capital Markets Limited, and SBICAP Trustee Company Limited ensures complex financial needs are met.
  • Expertise in Infrastructure and Non-Infrastructure Sectors: SBI has in-house expertise in appraising projects across:
    • Infrastructure Sector: Roads, power, ports, airports, etc., as defined by the Government of India’s Harmonized Master List of Infrastructure Sub-Sectors.
    • Non-Infrastructure Sector: Industries like steel, cement, textiles, etc.
    Dedicated teams with sector-specific knowledge ensure thorough project evaluation and customized solutions.
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    • Loan Amount and Tenure: Customizable loan amounts based on project scale and viability. Flexible tenures tailored to project cash flows. Moratorium periods available (e.g., up to 36 months for certain loans).
    • Interest Rates: Competitive rates linked to EBLR or MCLR. Option for fixed or floating interest rates. Rates vary based on credit rating and project viability.
    • Collateral and Security: Typically requires collateral like project assets or land. Collateral-free options available under Credit Guarantee Schemes (CGTMSE). Minimum credit rating may be required for certain schemes.
    • Eligibility Criteria: Available to corporates, MSMEs, startups, and institutions undertaking projects. Financial stability and satisfactory credit rating required. Sector-specific qualifications may apply (e.g., medical degrees for healthcare projects).
    • Processing and Documentation: Quick processing with 'In Principle' approvals in 30 minutes through Digital Lending Platform. Minimal documentation for digital applications. Processing fees typically 1-2% of the loan amount.
    • Specialized Support: Dedicated Project Finance Division and Infrastructure Financing Cell. 24/7 customer support through multiple channels. Digital platforms for easy application and tracking.
    • Sector-Specific Schemes: Loans for specific sectors such as education, healthcare, renewable energy, and MSME startups. Tailored support for greenfield and brownfield projects.
    • Additional Benefits: Option to take over high-cost loans from other banks. Flexible repayment options matching project cash flows. Potential tax benefits for certain projects.
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Benefits of Project Loans by State Bank of India (SBI)

  • Tailored Financial Solutions: SBI provides customized financing options, including term loans, External Commercial Borrowings (ECB), Foreign Currency Term Loans (FCTL), and non-fund-based facilities like Letters of Credit (LC) and Bank Guarantees, ensuring alignment with project-specific needs.
  • Support for Large-Scale Projects: With a minimum loan threshold of Rs. 10 crore, SBI caters to large-scale greenfield and brownfield projects, enabling businesses to undertake ambitious ventures in sectors like infrastructure (roads, ports, power) and non-infrastructure (steel, cement, textiles).
  • Competitive Interest Rates: Loans are offered at competitive rates linked to External Benchmark-based Lending Rate (EBLR) or Marginal Cost of Funds-based Lending Rate (MCLR), reducing the overall cost of borrowing.
  • Limited/Non-Recourse Financing: SBI’s limited or non-recourse financing structure minimizes promoter risk by restricting lender claims to project assets, particularly beneficial for Special Purpose Vehicles (SPVs) in infrastructure projects.
    • Flexible Repayment Terms: Repayment schedules are aligned with project cash flows, offering flexible tenures and moratorium periods, easing financial pressure during the initial project phase.
    • Extensive Network for Seamless Access: SBI’s vast network of over 24,000 domestic branches and 195 foreign offices across 36 countries ensures easy access to funds, and localized support for global projects.
    • Expert Appraisal and Risk Mitigation: In-house teams with sector-specific expertise and a panel of legal and technical experts conduct thorough project appraisals, ensuring robust risk assessment and viable project execution.
    • Syndication and Structuring Capabilities: SBI’s ability to arrange and syndicate loans for mega projects, in collaboration with SBI Capital Markets, ensures competitive pricing and access to large funding pools, benefiting complex.
    • Streamlined Procurement: Non-fund-based facilities like Letters of Credit for domestic and imported equipment simplify procurement processes, enabling timely project execution.
    • Faster Loan Processing: Standardized documentation and minimized credit appraisal timelines, supported by a dedicated structuring team, ensure quick loan approvals and disbursements.
    • Comprehensive Project Oversight: SBI takes on additional roles such as Security Agent or Monitoring/TRA (Trust and Retention Account) Agent, providing end-to-end project monitoring and financial management.
    • Access to Credit Guarantee Schemes: For certain eligible projects, SBI offers loans with reduced collateral requirements through Credit Guarantee Schemes, lowering financial barriers for borrowers.
    • Enhanced Project Viability: SBI’s structured financial solutions and expert guidance improve project feasibility, ensuring better returns on investment and long-term sustainability.
    • Global Reach and Expertise: With support from SBI’s International Division and SBICAP Trustee Company Limited, borrowers benefit from global financial expertise, making SBI a preferred partner for cross-border projects.
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How to Apply for State Bank of India (SBI) Project Loans

  • 1. Determine Eligibility
    • Project must require a minimum loan of ₹10 crore
    • Applicable for greenfield or brownfield infrastructure and non-infrastructure projects
    • Ensure the project meets SBI’s viability and appraisal standards
  • 2. Prepare a Detailed Project Report (DPR)
    • Include project overview, objectives, scope, and implementation timeline
    • Provide technical and financial feasibility studies
    • Submit revenue models, projected cash flows, and promoter details
    • Attach required environmental and regulatory approvals
  • 3. Gather Required Documents
    • Company registration documents (MOA, AOA, PAN, GST)
    • Audited financials for the last 3 years, ITRs, and projected financials
    • Land documents, licenses, and sector-specific approvals
    • KYC documents for promoters/directors
    • Collateral and guarantee documents, if applicable
  • 4. Approach SBI’s Project Finance Unit
    • Visit an SBI branch handling corporate/project finance or the Corporate Centre (Mumbai)
    • Submit enquiry via SBI’s website (sbi.co.in) under corporate banking/project finance
    • For large or syndicated loans, coordinate with SBI Capital Markets
  • 5. Submit Application
    • Complete the project loan application form with DPR and supporting documents
    • Specify loan type: term loan, ECB, LC, or non-fund-based facility
    • Ensure completeness and accuracy to avoid processing delays
  • 6. Project Appraisal and Due Diligence
    • SBI’s team evaluates the DPR for technical/financial feasibility
    • Includes promoter assessment, site visits, market analysis, and risk checks
    • Appraisal timelines depend on loan size and project complexity
  • 7. Loan Sanction and Negotiation
    • SBI issues sanction letter detailing amount, rate (EBLR/MCLR), tenure, margin, and collateral
    • Negotiate repayment schedule, moratorium period, and other conditions
  • 8. Agreement and Documentation
    • Sign loan agreement and security documents (e.g., hypothecation, mortgage)
    • Fulfill pre-disbursement terms (e.g., equity contribution, TRA setup)
  • 9. Loan Disbursement
    • Funds released in stages based on project progress/milestones
    • SBI may use LC facility for imported capital goods
  • 10. Monitoring and Compliance
    • SBI may act as Monitoring Agent to track usage and execution
    • Submit regular financials, status reports, and fund utilization certificates
  • 11. Regular Progress Reviews
    • Frequent site inspections and reviews based on milestones
    • Progress reports submitted to SBI and stakeholders
  • 12. Post-Disbursement Compliance
    • Maintain compliance with environmental, regulatory, and financial norms
    • Ensure timely repayment and report any deviations from the loan agreement
  • 13. Closing the Loan
    • Once the project is completed and fully operational, ensure full repayment
    • Submit completion reports to SBI, including final financials and certificates
    • Release of collateral and security after loan repayment

Eligibility Criteria for State Bank of India (SBI) Project Loans

  • 1. Eligible Applicants
    • Private and Public Limited Companies registered in India
    • Special Purpose Vehicles (SPVs), particularly for infrastructure projects
    • Partnership Firms and Trusts/Societies (for education, healthcare, renewable energy)
    • Government Entities for PPP or state-backed initiatives
    • Promoters with credible track record and relevant industry experience
  • 2. Project Type
    • Infrastructure Projects: Roads, ports, airports, power, railways, etc.
    • Non-Infrastructure Projects: Manufacturing (steel, textiles), services (hospitality, education)
    • Both greenfield (new) and brownfield (expansion/upgrade) projects are eligible
  • 3. Minimum Loan Size
    • Project must require a minimum loan of ₹10 crore (as per SBI’s current policy)
    • Focus is on large-scale projects with substantial economic impact
  • 4. Financial Viability
    • Sound projected cash flows sufficient for loan servicing
    • Minimum DSCR (Debt Service Coverage Ratio) of 1.2 to 1.5
    • Positive Net Present Value (NPV) based on realistic assumptions
    • Detailed Project Report (DPR) covering market and financial analysis is mandatory
  • 5. Promoter’s Contribution
    • Minimum equity/margin of 10%–25% of project cost
    • Higher contribution may be needed for high-risk projects
    • Proof of promoter equity infusion via bank statements or escrow accounts
  • 6. Collateral and Security
    • Limited/Non-recourse: Security is usually project assets (land, equipment, cash flows)
    • Recourse: May require promoter or corporate guarantees and additional collateral
    • Eligible projects under CG schemes may enjoy relaxed collateral norms
  • 7. Regulatory and Environmental Approvals
    • Clearances from MoEFCC or State Pollution Control Boards
    • Land acquisition/lease agreements and title documents
    • Sector-specific licenses and statutory compliance
  • 8. Promoter Creditworthiness
    • Good CIBIL score and clean credit history
    • Industry experience and professional management team
    • No legal or insolvency issues pending
  • 9. Project Appraisal Requirements
    • Technical and financial evaluation by SBI’s appraisal team
    • Market demand analysis and competitor review
    • Defined risk mitigation measures like insurance or hedging (for forex loans)
    • Third-party validation may be required
  • 10. Sector-Specific Requirements
    • Infrastructure: Must align with government infrastructure priorities or PPP models
    • Renewable Energy: Power Purchase Agreements (PPAs) and subsidy eligibility
    • Manufacturing: Clear demand analysis and cost efficiency
  • 11. Additional Considerations
    • Projects under government schemes (e.g., Stand-Up India, Make in India) may benefit from easier terms
    • Syndicated loans involve SBI Capital Markets and may require consortium agreements
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Documents Required for SBI Project Loans

  • 1. Business and Legal Documents
    Certificate of Incorporation (for companies).
    Partnership Deed (for partnership firms).
    Trust Deed or Registration Certificate (for trusts/societies).
    Memorandum of Association (MOA) and Articles of Association (AOA).
    PAN Card of the entity.
    GST Registration Certificate (if applicable).
    Board Resolution authorizing the loan application.
    List of Directors/Shareholders with shareholding pattern.
    Promoters' resumes and background details.
  • 2. Financial Documents
    Audited Balance Sheets, Profit & Loss Accounts, and Cash Flow Statements for the last 3 years.
    Auditor’s Report and Notes to Accounts.
    Income Tax Returns (entity and promoters) for the last 3 years.
    Projected revenue, expenses, and cash flow statements.
    Debt Service Coverage Ratio (DSCR) calculations.
    Bank statements (last 6–12 months).
    Existing loan details (if any).
    Net Worth Statements of promoters (certified by CA).
  • 3. Project-Specific Documents
    Detailed Project Report (DPR) covering technical, financial, and market feasibility.
    Project Implementation Schedule and Cost Estimates.
    Revenue Model: Contracts, PPAs, or off-take agreements.
    Proof of Promoter’s Equity Contribution (e.g., bank statements, escrow account).
  • 4. Regulatory and Statutory Documents
    Environmental Clearances from MoEFCC or State Pollution Control Board.
    Environmental Impact Assessment (EIA) report, if applicable.
    Land Documents: Sale deed, lease agreement, title clearance.
    Land use/conversion certificate.
    Sector-Specific Approvals and NOCs.
    Government Approvals for PPP or infrastructure projects.
  • 5. Collateral and Security Documents
    Property documents: Sale deed, valuation report, and encumbrance certificate
    - Details of other security assets like machinery or shares.
    Guarantee Documents: Personal or corporate guarantee agreements.
    Net worth statements of guarantors.
    Details of project assets for hypothecation (for limited recourse loans).
  • 6. KYC Documents
    Identity Proof: Aadhaar, PAN, Passport, or Voter ID of promoters/directors.
    Address Proof: Aadhaar, Passport, Utility Bill, or Rental Agreement.
    Business KYC: Utility bill or lease agreement.
    Recent photographs of promoters or authorized signatories.
  • 7. Additional Documents (if applicable)
    Letter of Intent (LOI) or MoU with suppliers, contractors, or buyers.
    Project Insurance Policies (e.g., asset insurance).
    Credit Information Reports: CIBIL or equivalent reports for entity and promoters.
    Syndication Documents (if multiple lenders are involved).
    RBI approvals and forex hedging details for External Commercial Borrowings (ECBs).

Factors Considered for SBI Project Loans

  • 1. Project Viability
    Technical Feasibility: Assessment of project design, technology, scalability, and infrastructure needs.
    Financial Feasibility: Evaluation of cash flows, profitability, NPV, and IRR (target DSCR: 1.2–1.5).
    Market Viability: Demand-supply analysis, competition, and sector outlook.
  • 2. Promoter’s Credibility and Experience
    Track Record: Promoters’ success in similar projects or industries.
    Management Expertise: Skills to execute and operate the project efficiently.
    Financial Strength: Net worth, liquidity, and capacity to handle cost overruns.
  • 3. Project Cost and Funding Structure
    Cost Estimates: Detailed capex, working capital, and contingency breakdown.
    Promoter’s Contribution: Equity of 10–25% of project cost.
    Debt-Equity Ratio: Typically 2:1 or 3:1 for infrastructure projects.
    Funding Sources: Clarity on co-lenders, grants, or subsidies.
  • 4. Regulatory and Environmental Compliance
    Statutory Approvals: Licenses, sectoral clearances, and permissions.
    Environmental Approvals: EIA reports, MoEFCC approvals, and pollution control certifications.
    Land Acquisition: Clear ownership titles and land use approvals.
  • 5. Risk Assessment and Mitigation
    Project Risks: Construction delays, market changes, and cost overruns.
    Operational Risks: Supply chain reliability, technology robustness.
    Financial and Legal Risks: Currency risks for ECB/FCTL loans, pending litigations.
  • 6. Security and Collateral
    Limited/Non-Recourse Financing: Security based on project assets (land, equipment, receivables).
    Recourse Financing: May need additional collateral or corporate guarantees.
    Valuation: Independent valuation of collateral to maintain security cover.
  • 7. Repayment Capacity
    Cash Flow Alignment: Structured EMI schedule post-moratorium aligned with project revenue.
    Revenue Security: Off-take agreements, escrow mechanisms for loan recovery.
    Stress Testing: Assessment under adverse conditions like revenue dips or cost hikes.
  • 8. Sector and Policy Alignment
    Sector Priority: Projects in infrastructure, renewables, manufacturing under national initiatives.
    Government Support: Subsidies, tax incentives, or PPP benefits.
    Policy Compliance: RBI guidelines for ECBs and infrastructure financing.
  • 9. Project Scale and Impact
    Minimum Loan Size: ₹10 crore and above for project financing (effective from 15.10.2022).
    Economic Impact: Job creation, regional development, and GDP contribution.
    Scalability: Future adaptability and growth potential.
  • 10. Appraisal and Due Diligence
    Detailed Project Report (DPR): Comprehensive analysis of technical, financial, and market factors.
    Third-Party Validation: Independent expert evaluations for critical projects.

Frequently Asked Questions (FAQs)

1. What are SBI project loans?
SBI project loans are financial solutions provided for large-scale infrastructure and industrial projects. These include term loans, External Commercial Borrowings (ECB), Foreign Currency Term Loans (FCTL), and non-fund-based facilities like Letters of Credit (LC) and Bank Guarantees (BG), designed to meet capital-intensive needs.
2. Who is eligible to apply for an SBI project loan?
Eligible applicants include:
- Private/public limited companies, Special Purpose Vehicles (SPVs), partnership firms, and trusts/societies.
- Projects with a minimum loan requirement of ₹10 crore.
- Promoters with relevant experience, sound financials, and clean credit history.
- Technically and financially viable projects with necessary clearances.
3. What types of projects are financed by SBI?
SBI provides funding for:
- Infrastructure Projects: Roads, ports, power plants, railways, and airports (as per Harmonized Master List).
- Non-Infrastructure Projects: Manufacturing sectors (e.g., steel, cement) and service sectors (e.g., hospitality).
- Both Greenfield (new) and Brownfield (expansion) projects.
4. What is the minimum loan amount for a project loan?
The minimum loan amount is ₹10 crore as per SBI’s project finance policy (effective from 15.10.2022).
5. What documents are required to apply for a project loan?
Key documents include:
- Detailed Project Report (DPR) with technical and financial feasibility.
- Business incorporation documents (e.g., COI, MOA, AOA).
- Last 3 years’ audited financials, ITRs, and projections.
- Regulatory clearances and licenses.
- KYC of promoters and collateral/security documents.
6. How can I apply for an SBI project loan?
You can apply through:
- Branch: Approach SBI’s Project Finance SBU via a corporate banking branch or SBI's Corporate Centre in Mumbai.
- Online: Submit an enquiry through sbi.co.in.
- Syndicated Loans: Contact SBI Capital Markets for large syndicated funding.
Submit DPR, application, and documents for appraisal. Once approved, fulfill pre-disbursement conditions and sign loan agreements.
7. What is the interest rate for SBI project loans?
Interest rates are linked to the External Benchmark Lending Rate (EBLR) or MCLR. The actual rate depends on project type, borrower profile, credit rating, and market conditions. For latest rates, contact SBI directly or visit their website.
8. What is limited/non-recourse financing?
In limited/non-recourse financing, SBI’s claim is restricted to the project’s assets and cash flows. Promoter assets remain unaffected. This model is commonly used for infrastructure projects via SPVs, reducing risk for the project sponsor.
9. What is the repayment tenure for project loans?
Repayment period usually ranges from 5 to 15 years, depending on project viability and cash flow. A moratorium period of up to 18 months may be provided during the construction phase before EMIs begin.
10. Is collateral required for project loans?
- Non-recourse loans: Primarily secured by project assets (land, equipment, receivables).
- Recourse loans: May require additional collateral or promoter guarantees.
- Government schemes (e.g., Stand-Up India) may offer collateral-free options backed by credit guarantee support.

List of SBI Project Loans

  • SBI Term Loans
  • SBI External Commercial Borrowings (ECB)
  • SBI Foreign Currency Term Loans (FCTL)
  • SBI Letters of Credit (LC)
  • SBI Bank Guarantees (BG)
  • SBI Syndicated Loans
  • SBI Mezzanine Financing
  • SBI Takeout Financing
  • SBI Bridge Loans
  • SBI Working Capital Loans
  • SBI Project-Specific Working Capital
  • SBI Infrastructure Project Loans
  • SBI Export-Oriented Project Loans
  • SBI Green Energy Project Loans
  • SBI Non-Fund Based Facilities