The government may prepare a roadmap to establish a new non-banking financial company (NBFC) to give a push to infrastructure projects by enabling easier credit financing, two people aware of the matter said.
The NBFC would act as a guarantor for lower-rated infrastructure bonds, which would improve the ratings of projects. This would, in turn, improve the credit risk profile of infrastructure companies, and allow them to secure funding on more favourable terms.
Such an institution would also allow more long-term funds to be invested in the sector. This roadmap may be unveiled in the upcoming budget, and details of the entity including its structure may be finalized next fiscal (FY25), the first person mentioned above said.
Financing infrastructure projects has become critical, necessitating the creation of large dedicated financial institutions, the person added. Investments to the tune of ₹8-9 trillion are being made in infrastructure every year.
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