“Bank loans would now cost more but the policy makers must understand that setting up an SEZ is not only developing buildings. Funds for roads, ports, power stations and airports should cost less than real estate,” says Nikhil Gandhi, Chairman of Sea King Infrastruture.

“Listing and raising funds abroad are many options available to the upcoming SEZs,” he said. “We should have make our financing norms regarding SEZs clear from the beginning as investors do not like surprises,” he added. Sea King is setting up the Navi Mumbai SEZ in partnership with Mukesh Ambani.

In a notification issued this week, the Reserve Bank of India asked banks to treat all loans to SEZs as commercial real estate loans thus taking the SEZ developers by surprise. The RBI move will make banks to give higher weightage for such loans while making provisioning from their gross profits.

Companies like Bharat Forge, Videocon and Wockhardt which have signed SEZ agreements with the Maharashtra government are yet to tie up funds.

Reliance officials say they are looking at raising funds from all sources including banks but the priority now is to buy land. “We have not yet finalised how to fund the project,” said a Reliance official seeking anonymity. “But funds have never been a constraint for the company.”

Videocon officials say their unlisted firm, Videocon Realty Infrastructure will invest in the two SEZs now coming up at Aurangabad and Pune. “Apart from borrowings, flagship Videocon Industries will invest Rs 50 crore and have the right to purchase entire equity at par in five years. We were looking at banks for funds,” said an official.

Bankers say if the project is good, banks should not bother about the hike in risk weightage. “A 150 basis points hike in risk weightage on SEZ project should not have much impact,” said Keky Mistry, managing director of HDFC Ltd. As part of the SEZ project, Ambani has bid for Rs 2400 crore cross-harbour Mumbai to Navi Mumbai road project. The company has floated a special purpose vehicle to implement the project. “Certainly, this can’t be called a real estate,” officials said.

The bookings of space in the SEZs, he said, would also generate funds for the project and is one more option for the project developers. What has heartened SEZ developers is that many international investors are already queueing up to invest as partners for the SEZ projects.