Comments
A new system for rating of infrastructure projects has been launched by rating agency ICRA in association with the India Infrastructure Finance Company Ltd (IIFCL).
The novelty of the new system is that it will focus on the overall recovery of dues by the investor/lender over the lifecycle of the project, besides retaining the valuable aspect of probability of default already adopted by the conventional rating scale.
“Mandate given to us (IIFCL) through the Finance Minister’s budget speech was to develop a system that would enable more long term monies flow into the infrastructure sector. We are optimistic and hopeful that this would be fulfilled by the new methodology being launched today”, Sanjeev Kaushik, Chairman & Managing Director, IIFCL said.
It may be recalled that the Finance Minister Arun Jaitley had in his 2016-17 budget speech announced that a new credit rating system for infrastructure projects which gives emphasis to various in-built credit enhancement structures will be developed, instead of relying upon a standard perception of risk which often result in mispriced loans.
Kaushik highlighted that the new credit rating system for infrastructure projects was being launched at a time when banks are under stress and there is a tremendous need to diversify the source of funding and attract long term monies into infrastructure projects.
The new rating system will emphasise on the overall recovery of external funds given the lender.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.