The India Ratings and Research has maintained a stable outlook on the overall infrastructure sector for FY21, while revising the outlook on toll roads and wind sector to negative from negative-to-stable and stable, respectively, the agency said in a press statement.
The agency said that wind assets profile face headwinds such as resource volatility and weakening profile of counterparties and original equipment manufacturers, who are also operations and maintenance contractors. Economic growth deceleration has affected the transportation sector, particularly toll roads,
The overall financing environment for infrastructure remains moderate. Bank loan financing continues to dominate with the increasing interest of international investors for renewable projects with a reasonable operating history. The green shoots at the global market prevent a breach of group exposure norms of banks, thus making banking lines available for borrowings.
The agency in the statement added that uneven plant load factor performance in wind assets, weak counterparties and a few weak operations and maintenance contractors are placing pressure on the ratings. Counterparties financial stress and distribution companies higher dependence on an external source of funding to settle the mounting power purchase dues do not augur well for projects and elevates the counterparty risk.