mumbai ilfs infra asset management has raised rs 10001500 crore as the first part of a 5billion infrastructure debt fund from five stateowned general insurance companies general insurance corporation of india new india united national and oriental insurance have entered into an agreement to purchase 2 per cent stake each said ramesh bawa managing director and chief executive officer of ilfs financial services they will put up to rs 1500 crore and help us convince foreign pension funds and insurance companies the insurance companies have invested in the first such fund after the government first announced the measure in its budget for 201112 infrastructure debt funds are set up to provide takeout finance for infrastructure projects and ease pressure on the banking system the fund will be used to purchase loans from banks given to infrastructure projects such as power plants roads and airports we are entering into an mou today to invest rs 100 crore each for two years said an insurance company executive on the condition of anonymity the move to acquire stake by insurance companies will give confidence to overseas investors including pension funds and insurance companies to invest in the debt fund which is planning to raise 5 billion about rs 32000 crore over the next five years it will also keep these insurance companies from investing in any rival debt fund by being a partner in the ilfs debt fund india is targeting a 1trillion fund for infrastructure returns on investment are not adequate for investors to come in besides most of the projects are hit due to hurdles in environmental clearances nonlife insurance companies can invest up to 10 per cent of their investible corpus into infrastructure as per investment guidelines the irda had recently said that investments in infra debt funds would be considered under exposure to infrastructure sector the regulator had received an application from lt infra debt seeking nod for the issue of rs 500 crore nonconvertible debentures to allow insurance companies to consider investments in sector finance minister p chidambaram said while presenting the interim budget on monday we must rebuild our infrastructure and add a huge quantity of new infrastructure every proven model must be adopted and the ppp model must be more widely used new financing structures must be created for longterm funds and pooling of investments according to a report by global financial services group macquarie banks have restructured more than rs 25 lakh crore in debt since the corporate debt restructuring programme was introduced big infrastructure groups such as gmr gvk essar and jaiprakash associates are trying to manage their finances by selling noncore assets and many of them are delaying debt restructuring by evergreening or refinancing which will be unviable over the long term