Infrastructure Finance
Insuring Infrastructure
Limited options for tailor-made coverage
Insurance coverage for infrastructure projects is limited. The infrastructure insurance segment accounts for only 7 per cent of the total general insurance pie, a paltry proportion compared to the value and size of projects involved. […]
Small Steps
Recent developments with regard to emerging funding sources
To meet the financing requirement of the infrastructure sector, the development of alternative funding sources has assumed greater importance in recent months. This is because banks, the traditional source of funds, have limited latitude for […]
Encouraging Prospects
PE deal activity in the infrastructure space continues
Equity financing typically meets about a fourth of the cost of an infrastructure project. It primarily comes through project promoters or private equity (PE) investors. Though equity does not form a very large part of […]
Slump in Activity
Dip in capital issues due to tepid investor response
The initial public offering (IPO) market for the economy as a whole has showed signs of revival since 2015-16. The current fiscal year (till November 2016) recorded the highest issuances since 2010-11. However, a similar […]
Sluggish Growth
Greater participation from NBFCs required
The new capital adequacy requirements set under Basel III and the deterioration in asset quality of banks (mostly in infrastructure) has required the government to encourage credit institutions to play a bigger role that can […]
Easing Norms
ECBs expected to play a greater role
As foreign loans are cheaper than raising funds domestically, external commercial borrowings (ECBs) are an attractive option for infrastructure players looking to finance projects. In a recent policy amendment, the Reserve Bank of India (RBI) […]
Sustained Support
Multilateral agencies help meet financing needs
In a scenario where the government has accorded first and foremost priority to infrastructure development, along with the present inadequacy of funds for infrastructure projects, the role of banks and public financial institutions needs to […]
Lending Constraints
Bank credit stymied by stressed assets
Banks, the predominant providers of infrastructure finance, are reeling under unprecedented stress levels leading to reduced credit availability to the sector. Currently, the banking sector’s exposure to infrastructure stands at 15 per cent of gross […]
New Funds
Will they bridge the gap in financing?
Infrastructure financing has been a vexed issue in India. Traditionally, banks have been the biggest source of funds for infrastructure projects. However, lately, factors such as the exhaustion of sectoral limits, the adoption of Basel […]
Cautious Optimism
Hopes pinned on new funding sources
Financing infrastructure projects has always been difficult in India. In the past few years, the already difficult situation has been exacerbated, as banks, the largest financiers of the sector, have been affected by high levels […]