The facility will be used as a back-stop arrangement in products like take-out financing where IDFC has to commit funds for a future date -- say, five years latter.

"In the normal course, we would be able to fund our commitment. But suppose at the time of take-out, some major disruptions take place, we could draw upon the support," IDFC deputy managing director Nasser Munji said.

He said what is being negotiated with World Bank is a new product that could mitigate the sort of risk IDFC wishes to take. Unlike a line of credit, the new product will be cheaper as the cash support commitment will be drawn only in case of an emergency.

"This facilitywill help in the better matching of our assets and laibilities," Munji said. The World Bank support is carved out of an infrastructure financing facility that it has for developing countries. Other financial institutions like IL&FS is also likely to join the financing facility once the final structure is reached.

The World Bank support will not constitute IDFC's resource mobilisation plans. Muji said that IDFC is clear about its resource mobilisation plans. "We would be essentially tapping domestic resources. There is enough money in the domestic market for infrastructure funding in the immediate future," he said.

The new World Bank facility will be crucial for IDFC as it is in the forefront of various credit and liquidity enhancement products, which mitigates banks and financial institutions' liquidity and liability maturity problems. It recently entered into a Rs 500-crore take-out financing agreement with the State Bank of India. Going by the terms of the agreement, IDFC will take out SBI's loan afterfive years and carry it on its own books.

With such a facility, SBI is able to take part in the long-gestation infrastructure funding where the loan maturity is mostly upwards 10 years, even though the maturity profile of its funds is in the range of five years.

IDFC is also negotiating with other banks for a similiar facility, which will be inked after the institution gives the final touches to documentaion with SBI.