The Development Finance Institution (DFI) is the big deal today. Will this attempt by the government prove to be a game-changer for funding the cash-strapped infrastructure sector in the country is the big question!

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So far the story goes that several attempts have been made by the government and many have failed or DFI’s have converted into universal banks and also banks have proved inadequate to quench the thirst of this sector especially due to the asset-liability mismatch.

So there is an urgent need to draw deep-pocketed patient long-term capital to fund the infra of the country for a long period of time. Let us understand what can be done differently for the success of DFI this time around from the experts who have their skin in the game and are running day-to-day operations in this field.

In this episode of 'Big Deal', CNBC-TV18's Nisha Poddar discuss with Abizer Diwanji, partner & national leader financial services at EY-India; corporate view from Pratik Agarwal, managing director of Sterlite Power and from the global investor side we have Srini Nagarajan, managing director and head-Asia of CDC India which is a UK-based DFI.

Diwanji said, "Is there a need for DFI? I think certainly there is, for a couple of reasons. It has been proven enough that we need special skills in terms of managing project financing and universal banks what they have been doing otherwise generally lack that skill. So I think a special pool of individuals who are able to assess project finance well and infrastructure financing well is required."

"Inherently, why DFI has failed is that in India especially all the risk of implementation are sitting on a balance sheet of a bank, irrespective of whether that risk can be ever managed by a bank," he added.

Agarwal said, "This move of having an India-backed DFI is a very positive and is something that we find in all major developing economies and developed economies in the world. They play a critical role in getting infrastructure assets out of the greenfield stage firmly into the Brownfield stage and eventually into the bond market."

He further said, "As far as we are concerned, we are among the three largest transmission developers in the country with about 30 percent market share in India. We have found that there isn’t a consistent stable source of long-term debt capital available in the country."

For full interview, watch accompanying video...

(Edited by : Jomy Pullokaran)