Jannoandseekho.in | Agriculture Desk
Published: August 28, 2026
The National Bank for Agriculture and Rural Development (NABARD) and the National Bank for Financing Infrastructure and Development (NaBFID) have signed a Memorandum of Understanding (MoU) aimed at strengthening financing for infrastructure projects with a significant rural and agricultural impact.
The partnership combines NABARD’s expertise in agriculture and rural development with NaBFID’s specialised experience in long-term infrastructure financing. The initiative is expected to improve the availability of long-term and competitively priced finance for commercially viable projects across India’s rural economy.
For the agriculture sector, the collaboration could be particularly important in areas such as food processing, irrigation, warehousing, post-harvest storage, cold chains and rural connectivity.
Infrastructure is a critical part of India’s agricultural economy. Farmers need reliable irrigation, storage, transportation, processing and market facilities to reduce losses and obtain better returns from their produce.
The new NABARD-NaBFID partnership aims to support projects that can strengthen these links across the agricultural value chain.
The two institutions will explore opportunities for joint financing, infrastructure advisory services, knowledge sharing and innovative financing solutions.
Their cooperation will cover projects from the initial identification stage through appraisal, due diligence, financing, structuring and monitoring.
The partnership will focus on Public Private Partnership (PPP) projects, agri-value chains and infrastructure projects with strong rural linkages.
Key areas include:
These sectors can play an important role in improving agricultural supply chains and connecting farmers with markets.
One of the important areas highlighted under the partnership is agri-value-chain infrastructure.
India produces large quantities of agricultural commodities, but inadequate storage, processing and transportation facilities can result in post-harvest losses and limit farmers’ ability to obtain better value from their produce.
Investment in modern warehouses, cold chains and food-processing facilities can help create stronger links between farms, processors, traders and consumers.
According to NaBFID Managing Director Shri Rajkiran Rai G, there is an opportunity to develop commercially viable and bankable projects in areas such as food processing, storage and cold-chain connectivity.
Such projects can contribute to stronger agricultural value chains and potentially support efforts to improve farmer incomes.
NABARD has extensive experience in financing and supporting India’s agriculture and rural economy.
Speaking about the partnership, NABARD Chairman Dr Shaji Krishnan V. highlighted the social as well as commercial importance of rural infrastructure.
The collaboration will allow the institutions to work together on areas including value-chain financing, capacity building and infrastructure development.
The partnership is also expected to help develop market-based and financially sustainable structures for rural infrastructure projects.
The MoU goes beyond financing alone. NABARD and NaBFID will explore cooperation across the complete project lifecycle.
This may include:
Project Identification: Finding infrastructure projects with strong rural and agricultural linkages.
Project Appraisal: Assessing the technical and financial viability of proposed projects.
Due Diligence: Evaluating projects before financing decisions are made.
Credit Structuring: Developing suitable financing structures for infrastructure projects.
Financial Modelling: Supporting projects in assessing costs, revenues, risks and financing requirements.
Debt Syndication: Exploring opportunities to mobilise financing from multiple lenders.
Project Monitoring: Working together on monitoring funded projects.
The institutions will also undertake joint capacity-building initiatives using their respective training institutions.
The impact of infrastructure investment is not limited to infrastructure companies or financial institutions. Stronger rural infrastructure can have direct and indirect benefits for farmers.
For example, better cold-storage and warehousing facilities can help reduce post-harvest losses. Improved roads can make it easier to transport agricultural produce to markets. Food-processing facilities can create opportunities for value addition, while irrigation projects can improve agricultural productivity and resilience.
Better market infrastructure can also strengthen connections between farmers and buyers.
However, the ultimate benefits will depend on how effectively projects are identified, financed, implemented and operated.
Rural connectivity remains an important part of agricultural development. Poor roads and inadequate transportation infrastructure can increase logistics costs and make it difficult for farmers to access markets.
Similarly, insufficient warehousing and storage facilities can force farmers to sell produce soon after harvest, sometimes when market prices are less favourable.
The NABARD-NaBFID collaboration seeks to support infrastructure that addresses such challenges while remaining commercially viable and financially sustainable.
The partnership is aligned with the broader objective of developing a stronger and more modern rural economy under the vision of Viksit Bharat.
Modern agricultural infrastructure can help India build more resilient supply chains, improve market connectivity and encourage greater value addition within the agriculture sector.
By bringing together rural-sector expertise and infrastructure-financing capabilities, NABARD and NaBFID aim to expand the flow of long-term finance into projects that can support sustainable rural development.
NABARD is India’s premier development financial institution focused on agriculture and rural development, while NaBFID was established as a Development Financial Institution to address India’s long-term infrastructure financing requirements.
Their new partnership therefore brings together two complementary areas of expertise:
NABARD: Agriculture, rural development, rural credit and agricultural infrastructure.
NaBFID: Long-term infrastructure financing, project finance and infrastructure development.
The combination could help create more bankable projects in rural areas and improve access to long-term financing.
The NABARD-NaBFID MoU could provide a significant push to rural infrastructure financing in India, particularly in sectors such as irrigation, food processing, cold chains, warehousing, storage, rural roads and agricultural value chains.
For the agriculture sector, better infrastructure can help address post-harvest losses, improve connectivity and market access, encourage value addition and create a stronger rural supply chain.
The success of the initiative will ultimately depend on the development and implementation of financially sustainable projects that deliver measurable benefits to India’s rural economy and farming community.
The National Bank for Agriculture and Rural Development (NABARD) was established on July 12, 1982, with its headquarters in Mumbai. It is a premier development financial institution working to promote sustainable and equitable agriculture and rural prosperity through credit support, institutional development and related initiatives.
The National Bank for Financing Infrastructure and Development (NaBFID) was established in April 2021 as a Development Financial Institution. It focuses on addressing the long-term financing requirements of India’s infrastructure sector and supporting the development of the country’s infrastructure ecosystem.
Jannoandseekho.in | Agriculture Desk
Disclaimer: This article is based on information provided regarding the NABARD-NaBFID MoU. The actual impact on farmers and rural businesses will depend on the projects financed and their implementation.
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