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Need to develop alternative funding avenues: Icra

Press Trust of India  |  New Delhi 

Credit rating agency today stressed that there is a need to come up with alternative funding avenues as banks and non-financial companies (NBFCs) are overburdened by infrastructure credit.

Vice-President Shubham Jain said this, among other factors, limits their ability for fresh lending.

He was speaking during the session on 'Funding challenges for infrastructure sector', according to a statement.

gave a brief presentation on 'Emerging Trends, New Challenges, and Outlook for Financing in Infrastructure Sector'.

He elaborated on Icra's approach for rating infrastructure investment trusts (InvITs) and the new expected loss (EL) based credit rating scale for the sector.

"It is encouraging to see multiple initiatives being taken by the and regulators to improve the funding availability for the infrastructure sector. Emerging avenues like masala bonds, InvITs, and NIIF have the potential to significantly improve the infrastructure funding landscape in India," he said.

"However, these being new products would require consistent regulatory support and investor acceptance. Some initiatives like infrastructure debt funds, take-out financing did not perform as was initially envisaged and the learning from the same also needs to be incorporated in the new products."

K Ramakrishna Rao, Principal Secretary (finance), Telangana, emphasised on the need for developing infrastructure in the country and synergy between the and private agencies.

He also spoke of how the Telangana has been focussing on creating infrastructure assets and consistently increasing its budgetary allocation for key segments like irrigation and water supply.

"I hope the new credit rating system for the infrastructure sector would help address some of the weaknesses in the current rating system and improve funding availability for viable infrastructure projects," he added.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, March 15 2017. 18:49 IST