H1 infrastructure finance posts 13 percent growth

The infrastructure finance portfolio continued to grow and posted a 13 percent rise during the first half of this fiscal year. According to the State Bank of Pakistan's Infrastructure Finance Overview (July-December 2016), infrastructure projects have recently seen increase in financing from banks and Development Finance Institutions (DFIs) and an analysis of the infrastructure financing portfolio of banks & DFIs for first half of FY-17 depicts sufficient growth.
Infrastructure finance portfolio witnessed a 13 percent growth during July-January of this fiscal year. The total amount outstanding against infrastructure finance reached Rs 471.2 billion mark at the end of Dec-2016 compared with Rs 417 billion at the end of June 2016, showing an increase of Rs 53.4 billion. It includes infrastructure projects financed (both fund & non-fund based) by banks & DFIs as per SBP's guidelines.
Power generation, petroleum, oil & gas and roads have noticed a growth in outstanding portfolio on half yearly basis and during the period under review (July-December, 2016) banks & DFIs disbursed Rs 78 billion, mainly to power generation, power transmission, oil & gas, petroleum and road infrastructure sectors. On YoY basis, outstanding amount increased by Rs 103 billion or 28 percent and except for telecom, all sectors witnessed growth in outstanding financing. The cumulative amount disbursed as of Dec-2016 increased by 12.5 percent on half yearly basis to reach Rs 584 billion.
At the end of the period under review, the total amount sanctioned by Banks & DFIs for infrastructure projects reached Rs 1,104 billion and the sectors witnessing growth in sanctioned amount during the half year are power generation and oil & gas sectors. Non-performing loans (NPLs) as a percentage of gross outstanding loan portfolios decreased from 3.39 percent to 2.69 percent on half yearly basis and from 3.83 percent to 2.69 percent on YoY basis.
The institutional share in outstanding portfolio has largely remained the same with a large share resting with private sector banks followed by public sector banks. Infrastructure financing portfolio of banks & DFIs has shown encouraging growth since December 2013 when it was at Rs 255 billion.