Reacting to the latest changes in ECB policy, real estate major Unitech said that while the move was "positive", it would not make a big difference in the short-term.

"There would be no immediate benefit due to the global financial market conditions. However, this offers an additional avenue for SEZ developers to get funding requirement at a lower cost", a senior Unitech offical said. Currently, Unitech has five IT-SEZs in the country.

The Government on Tuesday modified its external commercial borrowing (ECB) policy to allow SEZ developers to avail ECBs for providing infrastructure facilities within the SEZ.

The SEZ developers can avail themselves of ECBs only under the approval route, according to a Finance Ministry release. However, ECBs will not be permissible for development of integrated township and commercial real estate within the Special Economic Zones (SEZs).

Meanwhile, the country's largest real estate company, DLF's Group Executive Director, Mr Rajiv Talwar, pointed out that while money was available overseas, the current viability of new SEZ projects was itself is under question due to the slowdown seen in exports. Currently, DLF has five SEZs that are fully operational while it had recently got Government approval for de-notification of five other SEZs..

Hitherto, ECB was not permissible for the development of the SEZs. Only the units in the SEZs were permitted to access ECBs and that too for their own requirements.

As part of the review of the ECB policy, the Finance Ministry has also decided to continue the existing policy of permitting development of integrated township as a permissible end use, under the approval route, until December 2009.

Under the existing ECB policy, utilisation of ECB proceeds for the real estate is not permitted. However, as a sector-specific measure, the use of ECB proceeds for the development of integrated township had been permitted in January 2009 and the policy was due for review in June 2009.

The Export Promotion Council for EOUs and SEZs (EPCES) Director General, Mr L.B. Singhal, termed the Centre's move as a "good step forward", pointing out that SEZ developers can now access ECB funding for infrastructure facilities in a SEZ.

"SEZs by nature are infrastructure projects. One of the stated objective of the SEZ Act is to create infrastructure. In the first place, the ECB window should not have been withdrawn for SEZs", Mr Singhal told Business Line.

Mr Singhal also said that RBI, along with the guidelines on the latest ECB policy changes, should issue directions to the effect that the terms and conditions for lending by commercial banks to SEZs should be the same as those specified for infrastructure financing.