InfraZamin Pakistan Limited (InfraZamin) has been assigned the highest credit ratings possible by the Pakistan Credit Rating Agency (PACRA),with a long-term rating of AAA (Triple A) and short-term rating of A1+ (A One Plus). The strong positive rating by PACRA comes as InfraZamin is gearing up to launch business operations and lends further support for InfraZamin’s plans to develop the infrastructure financing market in Pakistan by offering credit enhancement solutions.
InfraZamin Pakistan is a commercial credit enhancement facility, developed by GuarantCo, that seeks to crowdin funding from the local market for sustainable and socially responsible infrastructure projects in Pakistan.
The facility is an initiative of the Private Infrastructure Development Group (PIDG). InfraZamin’s sponsors include PIDG companies InfraCo Asia Investments (InfraCo Asia) and GuarantCo, in partnership with non-profit Karandaaz Pakistan. This will be the first-of-its-kind facility in Pakistan that seeks to provide local currency guarantee solutions and is expected to be vastly beneficial in bringing newprojects and borrowers to the market. The establishment of InfraZamin benefitted from the advisory support of Capital Partners Group.
InfraZaminwill serve as a catalyst for greater private sector participation in long-term, local currency financing of infrastructure in Pakistan. At present, infrastructure financing in Pakistan is characterised by the dominanceofcommercial bank lending, underdeveloped capital markets, the public sector crowding out private sector borrowers,anda heavy reliance on external markets.
InfraZamin’s credit enhancement solutions are intended to address these gaps in infrastructure financing in order to provide new and improved access to basic infrastructure, create jobs, as well as promote inclusive growth and sustainable development. Development impact, trust and additionality form the core of InfraZamin’s business values along with a commitment to the United Nation’s Sustainable Development Goals (SDGs).
The guarantee solutions will target sectors which typically face bankability issues, and which present the opportunity to create high development impact in Pakistan. These sectors range from digital communications, torenewable energy, education, healthcare, and water and sanitation, where there is still chronic underinvestment.
InfraZamin has a total of PKR 4.125 billion of equity capital from InfraCo Asia as 60% shareholder and Karandaaz as 40% shareholder. In addition to the paid-in capital, GuarantCo will provide a Contingent Capital Facility with a callable capital of up to PKR 8.125 billion. InfraZamin has the ability to leverage its capital when issuing guarantees.
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Prabaljit Sarkar, Director
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