India's first infrastructure debt fund `Infradebt' assigned 'AAA' rating

Credit rating agency Crisil has assigned 'AAA' rating to India Infradebt Limited (Infradebt), the country's first infrastructure debt fund (IDF) under the non-banking finance company structure.

Infradebt also awarded its first sanction letter to a road project by Jaiprakash group for refinancing of NHAI-bid road-project of Zirakpur-Parwanoo section of NH-22 built by Himalayan Expressway Limited.

The 'Highest safety' credit rating awarded to Infradebt is based on its viable business model, prudent regulatory and policy structure, stringent appraisal systems, robust capital base, strong governance and management team, Crisil said.

Infrastructure debt funds (IDFs) are going to play a key role in the financing of the overall requirements of infrastructure funding, said economic affairs secretary Arvind Mayaram, adding that higher rating would make an IDF competitive in the refinancing market.

Mayaram also said there was great demand among the foreign investors like the Kuwait Investment Authority, the Abu Dhabi Investment Authority and various other sovereign wealth funds for long-term investment in the country.

The fund is jointly promoted by ICICI Bank, Bank of Baroda, Life Insurance Corporation (LIC) and Citicorp Finance (India).

India is targeting investments of nearly $1 trillion in infrastructure between 2012-17, half of which is expected to come from private investors.

''We require about $1 trillion for infrastructure sector, out of which $500 billion have to come from private sector. Therefore, we have to provide multiple instruments to the private sector to raise funds,'' Mayaram said at a function organised at the finance ministry.

ICICI Bank managing director and chief executive Chanda Kochhar said the ''rating would enable Infradebt to access long-term funds for Indian infrastructure sector at low interest rates from domestic markets as well as pension and insurance funds.''