NaBFID to set up India’s first infrastructure data repository – Infrastructure News

The National Bank of Financing Infrastructure and Development (NaBFID) plans to set up the country’s first infrastructure data repository to attract private investment by offering greater transparency and detailed information on new and ongoing infrastructure projects. Initially, data will come from banks, non-banking financial companies (NBFCs) and infrastructure companies, and later, information from other government entities such as the National Highways Authority of India (NHAI), PM Gatishakti and other stakeholders will be integrated into the repository. This will require regulatory approvals and support from various government departments.

“Today we have real data on retail and SMEs loans because we have credit bureaus but there is no such qualitative data for the infrastructure sector,” Rajkiran Rai G, Managing Director, told FE. “With the data repository, we want to collect comprehensive data of all infrastructure projects and make it available to all the stakeholders of infrastructure development,” he added.

This will attract private investment into the infrastructure sector as investors will get insight into the various stages of the project. Investors will be able to get a clear picture of how a specific project has progressed through the various stages, from start to finish.

The data repository will also enable investors to differentiate and compare the performance of individual sub-sectors within the infrastructure sector.

“Currently, it is very difficult for potential investors to determine whether a road project is less risky than a thermal power project or a renewable energy project. The data repository will help them make informed decisions before committing to a particular project,” Rai added.

The data repository will increase predictability for lenders and help them anticipate signs of potential stress building up in a project.

The infrastructure sector has been in the spotlight recently after the Reserve Bank of India (RBI) has published draft guidelines for infrastructure financing. According to the draft guidelines for project financing, a bank must set aside 5% of its exposure during the construction phase, which falls when the project becomes operational. Several stakeholders in the infrastructure sector have questioned the high provisions proposed by the banking regulator.

Having a dedicated data repository for the infrastructure sector will help in creating effective policies as it will help decision makers understand the performance of sub-sectors of the infrastructure sector. With the right support from the regulator and government, it can be more up-to-date and can help in predictive analysis.

“NaBFID is not just a financing entity. It is an entity that is building the entire ecosystem around infrastructure financing, developing new instruments, developing better project appraisal capabilities and, you know, helping through policy advocacy,” Rai added.

With the government’s increasing focus on strengthening infrastructure, lending for infrastructure projects has seen a sharp increase. Banks’ lending to the construction sector has grown by almost 26% in the last five years, while lending to the infrastructure sector has grown by 31%. Loans to the construction sector have increased from Rs 1.08 trillion in January 2019 to Rs 1.4 trillion in March this year. Loans to the infrastructure sector have increased from Rs 9.8 trillion in January 2019 to Rs 12.8 trillion in March this year.