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NaBFID is Required to Establish a Credit Enhancement Facility

The National Bank for Financing Infrastructure and Development (NaBFID) intends to introduce a structured partial credit enhancement facility to strengthen bond markets and establish a data repository for the infrastructure sector. This credit enhancement aims to elevate bond ratings by providing guarantees for bond payments up to a specified threshold, facilitating access to markets at more favorable rates compared to bank borrowing.

Upon evaluating NaBFID’s performance across multiple parameters, including business operations, resource mobilization, developmental initiatives, human resources, information technology, and financials, the finance ministry advised prioritizing sector specialization to improve evaluation and underwriting capabilities for large and intricate infrastructure projects. Additionally, NaBFID will establish a data repository for the infrastructure sector to bolster initiatives such as the National Infrastructure Pipeline and PM-Gati Shakti in attracting long-term capital.

NaBFID has approved a total of Rs 86,804 crore for projects across different infrastructure sectors throughout the country. These sectors include roads, renewable energy, ports, railways, water and sanitation, and city gas distribution. Significantly, half of the approved amount includes extended repayment periods, spanning from 20 to 50 years.

Looking ahead, NaBFID aims to sanction over Rs 3 lakh crore by March 2026, thus maintaining its focus on infrastructure financing and supporting the Viksit Bharat initiative.