Money & Banking

Lending to InvITs can improve infrastructure financing

Our Bureau Mumbai | Updated on October 17, 2019 Published on October 17, 2019

RBI’s circular to allow banks to lend to InvITs gives a much needed fillip to infrastructure financing and can enable InvIT platforms to become more competitive and get established as a credible source of financing.

Harsh Shah, CEO, India Grid Trust – India’s first power sector InvIT, said that Indian banks will now have the opportunity to lend to good and credible source of credit like InvITs, which are characterised by stringent corporate governance measures along with stable and predictable cash flows from operating infrastructure assets. IndiGrid is an infrastructure investment trust, sponsored by Sterlite Power Grid Ventures, which owns inter-state power transmission assets in India worth Rs 5,300 crore.

InvITs, generally come with better-quality assets, backed by ratings and predictable cash flows, which with this notification, can tap into long-term debt capital. This move will enable InvIT platforms to become more competitive and get established as a credible source of infrastructure financing, said Shah.”

Funding infrastructure requires large amount of financing and InvITs are trying to fill the gap as India attempts to become a $5 trillion economy. “I firmly believe, this is a game changer for the proliferation of InvITs as a credible alternative for infrastructure financing that will help India in achieving that target ,” Shah added.

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Published on October 17, 2019
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