According to local sources, the Indian firm L&T Infrastructure Finance, is launching a $500-million (Rs 2,708 crore) infrastructure debt fund and has started the road show approaching investors.

The debt fund will look to invest in distressed assets, particularly in the roads segment, renewable energy, power and urban infrastructure projects.

Larsen & Toubro, the $17.5-billion engineering and construction group, is one of the anchor investors in the new fund, and is expected to contribute up to $300 million (Rs 1,625 crore) to the proposed fund.

In his 2013 Budget speech, Indian finance minister said the government will be encouraging infrastructure debt funds to raise resources and provide long-term low-cost debt for infrastructure projects.

L&T Infrastructure Development Projects achieved financial closure for two road projects in Maharashtra on November 30, 2012:

• Four laning of Jalgaon- Maharashtra/Gujarat border section of NH-6 on DBFOT (toll)
• Four laning of Amravati-Jalgaon Section of NH-6 on DBFOT (Toll)

The fund would be a good solution to refinance bank loans from these and other projects owned by L&T Infrastructure Development Projects.