Infrastructure financing hits all-time high

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KARACHI: Infrastructure financing by banks and development finance institutions (DFIs) reached an all-time high of Rs1.05 trillion at the end of the April-June quarter, a year-on-year growth of 29pc.

According to State Bank of Pakistan’s Quarterly Infrastructure Finance Review (April-June 2016) released on Friday, private banks’ share in the total financing was 54 per cent compared to public sector banks’ 40pc.

During the quarter, the power generation sector enjoyed a growth of 35pc, power transmission 80pc oil and gas exploration 65pc and road, bridge and flyovers 35pc.

Banks and DFIs disbursed Rs52bn to mainly power generation, telecom, oil and gas, power transmission and road infrastructure sectors.

“Although infrastructure financing is predominantly skewed towards the power generation sector, consuming nearly 70pc of the Rs542bn outstanding at the end of June 2016, other sectors like petroleum, oil and gas and roads have recently seen a surge in financing,” the report said.

At the end of June, amount outstanding against infrastructure sectors reached Rs542bn, witnessing a growth 22pc as compared to the preceding quarter (January-March).

“On a year-on-year basis, outstanding amount increased by Rs213bn, or 64pc. Most of the sectors witnessed growth in outstanding financing,” the SBP said.

Disbursements during the quarter stood at Rs52bn, which was more than double compared to the previous quarter and for the same period a year earlier.

Non-performing loans as a percentage of gross outstanding decreased from 2.76pc to 2.56pc on a quarter-on-quarter basis.

“Infrastructure financing portfolio of banks and DFIs has shown encouraging growth since December 2013 when it was Rs255bn,” the report said.

The sectors where disbursements were made during the quarter included power generation, telecom, oil and gas, power transmission and road infrastructure sectors. The cumulative amount disbursed as of June 2016 increased by 10.5pc on a quarterly basis and by 31pc on an annual basis.

Infrastructure project financing portfolio of banks and DFIs has grown substantially since December 2013.

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