Photo by Alok Sharma on UnsplashHow will India meet its infrastructure demand?
At a GRI Infra India club meeting, experts discuss NIP and the outlook for 2020
January 22, 2020Infrastructure
The country’s massive infrastructure demand is estimated to reach $4 trillion by 2040. With the Indian government significantly upping spending in the last 4-5 years to over $60 billion annually, the country has also developed a comprehensive institutional framework for private participation in infrastructure to help keep up with the high aspirations. Through PPP’s, institutional investors have continued to participate in the financing, building, and operating of India’s infrastructure. There has been no shortage of investor appetite for the asset class following the global financial crisis.
GRI Infra India members and guests met for the first time in 2020, to discuss their expectations from the year and what they would actively like to create in the current market situation.
One big question was how the upcoming year will look in light of the recent introduction of the National Infrastructure Pipeline (NIP). In general, attendees were optimistic; the legislation will enable more infra projects, grow business, create jobs, and improve QoL. It’ll also help developers have a better idea of project supply and it limits the risk of financing falling through. They also believe NIP will in turn ease the acquisition of funding, as all of this bolsters investor confidence. This is all easier said than done, but with an effective implementation it should mean nothing but good for the market.
The issue of non-performing assets (NPAs) in Indian Infrastructure has become the subject of much deliberation and scrutiny. Increasing by 7% between 2008 and 2017 (as a percentage of total loans), NPAs have increasingly lowered banks’ ability to generate income and profitability, and therefore fund projects. Now however, it seems as though the worst is over.
The question of raising funding for greenfield and brownfield projects is expected to remain a challenge, yet a well structured project will always attract investors. Some strategies put forward to make the process easier included leveraging municipalities to improve urban infrastructure and increasing focus on storage to replace diesel as a fuel.
The 2nd annual Infra India GRI 2020 will return on February 19th and 20th in New Delhi, and will unite the most senior infrastructure investors, developers, operators, lenders, holding companies, and advisors active in Asia.
Article by Matt Harris
GRI Infra India members and guests met for the first time in 2020, to discuss their expectations from the year and what they would actively like to create in the current market situation.
One big question was how the upcoming year will look in light of the recent introduction of the National Infrastructure Pipeline (NIP). In general, attendees were optimistic; the legislation will enable more infra projects, grow business, create jobs, and improve QoL. It’ll also help developers have a better idea of project supply and it limits the risk of financing falling through. They also believe NIP will in turn ease the acquisition of funding, as all of this bolsters investor confidence. This is all easier said than done, but with an effective implementation it should mean nothing but good for the market.
The issue of non-performing assets (NPAs) in Indian Infrastructure has become the subject of much deliberation and scrutiny. Increasing by 7% between 2008 and 2017 (as a percentage of total loans), NPAs have increasingly lowered banks’ ability to generate income and profitability, and therefore fund projects. Now however, it seems as though the worst is over.
The question of raising funding for greenfield and brownfield projects is expected to remain a challenge, yet a well structured project will always attract investors. Some strategies put forward to make the process easier included leveraging municipalities to improve urban infrastructure and increasing focus on storage to replace diesel as a fuel.
The 2nd annual Infra India GRI 2020 will return on February 19th and 20th in New Delhi, and will unite the most senior infrastructure investors, developers, operators, lenders, holding companies, and advisors active in Asia.
Article by Matt Harris
