By Bl Mumbai Bureau
Copyright thehindubusinessline
To give a leg-up to infrastructure spending, which is estimated in the ₹90 lakh crore to ₹100 lakh crore range between fiscals 2026 and 2030, the National Bank for Financing Infrastructure and Development (NaBFID), on Thursday, launched Partial Credit Enhancement (PCE) facility.
This is aimed atstrengthening the infrastructure bond market and improve access to long-term capital for infrastructure projects.
Rajkiran Rai G, Managing Director, NaBFID, observed that PCE unlocks access to long-term capital from insurance companies, pension funds, provident funds and other institutional investors by improving the credit profile of infrastructure bonds.
Referring to challenges, including a norm that requires the aforementioned long-term investors to invest only in debt instruments carrying minimum rating prescribed by regulators, Rai said the new PCE framework, which was announced in the Budget, marks a decisive step towards deepening India’s bond market and mobilising patient capital for infrastructure.
A knowledge paper, put together jointly by Crisil Intelligence and NaBFID, noted that India’s vision of becoming a $7.0 trillion economy by 2030 (it recently surpassed the $4 trillion GDP milestone) and reaching $30.0 trillion by 2047, hinges on the creation of robust and modern infrastructure that improves its potential growth rate.
“The aspiration of becoming Viksit Bharat by 2047 calls for a structural transformation moving from a lower-middle income to a high-income economy. This transition demands sustained growth, powered by robust infrastructure that enables seamless connectivity, efficient logistics, and inclusive urbanisation,” said the paper.
economic progress
Rai emphasised that infrastructure is the backbone of economic progress, yet financing it at the required scale remains a formidable challenge.
“Traditional sources [primarily bank lending] are constrained by asset-liability mismatches and concentration risks. The bond market, despite its potential, has played a limited role in infrastructure funding.
“To bridge this gap, innovative mechanisms are imperative. It is in this context that Partial Credit Enhancement emerges as a game-changer,” he said.
By supporting credit ratings of infrastructure bonds from a relatively lower-rated to a higher-rated category, PCE transforms them potentially into more appealing assets for insurance companies, pension funds and provident funds, per the paper.
Further, this aligns the asset’s risk profile with the stringent, risk-averse investment mandates of these entities, allowing them to channel their vast patient capital into the infrastructure sector.
Published on September 18, 2025
