PACRA Maintains the Entity Ratings of Infra Zamin Pakistan Limited

Infra Zamin Pakistan Limited (IZP) is an innovative, for-profit credit enhancement facility funded with equity capital from InfraCo Asia Investments and Karandaaz Pakistan. The initiative is a collaborative effort of the Private Infrastructure Development Group (PIDG), funded by six governments (the UK, the Netherlands, Switzerland, Australia, Sweden, and Germany) and the IFC. InfraZamin leverages the prior experience of InfraCo Asia and GuarantCo in supporting infrastructure projects in Pakistan, as well as Karandaaz’s local market knowledge and track record of investments focused on supporting financial inclusion. Karandaaz Pakistan is a not-for-profit special-purpose vehicle set up to promote financial inclusion among individuals through technological solutions. GuarantCo, rated AAA by PACRA, was established in 2005 to help close the infrastructure funding gap and alleviate poverty in lower-income countries across Africa and Asia. The shareholding structure plays a pivotal role in the assignment of the rating. GuarantCo, member of the Private Infrastructure Development Group (PIDG), has extended a contingent capital facility of up to PKR 8.25 billion with a 23-year tenor to InfraZamin Pakistan to issue local currency credit guarantees against debt financing for infrastructure projects in multiple sectors specifically renewable energy, healthcare, transport, and digital communications. The contextual experience of the local market dynamics lends support to IZP. Being the first mover in the CGI industry of Pakistan, IZP aims to serve the local credit markets by providing credit guarantees to enhance the credit quality of infrastructure projects in Pakistan. The IZP executed its first business deal in CY22 with Multinet Pakistan (Pvt.) Limited. During CY23, the institution executed its second business deal with the Kashf Foundation. IZP is in the process of developing a business pipeline in the domains of renewable energy, digital infrastructure, transportation, healthcare, social infrastructure, and FMCG. On the financial profile side, during CY23, the institution's topline increased to PKR 738.4mln (CY22: PKR 499.5mln), attributable to inclined income from investments in government securities and revenue from guarantee contracts. Consequently, the net profitability of the institution increased to PKR 230mln (CY22: PKR 129mln). To keep itself aligned with the market dynamics, IZP is in the continuous process of exploring new avenues to enhance business operations for which the framework is being developed.
The ratings are dependent on the continued support and guidance from the key sponsors. The successful unfolding of the model is of absolute necessity. The governance and control mechanics are expected to remain intact in the future. However, the successful maturity of the business pipeline will remain of vital importance.

About the Entity
Infra Zamin Pakistan Limited was incorporated on Mar 30, 2020, as a non-bank financial company ("NBFC") domiciled in Pakistan. IZP is co-owned by Private Infrastructure Development Group (PIDG) company InfraCo Asia Investments via Indus Guarantees (60%) and Karandaaz Pakistan (40%). Shareholders have solemnized a Shareholders' Agreement which will determine their relationship among themselves and to the entity itself. IZP's Board of Directors currently constitutes two Indus nominees including the chairman, one Karandaaz nominee, one GuarantCo nominee, two independent directors, and the CEO. Ms. Maheen Rehman, the CEO of Infra Zamin Pakistan Limited, has a rich experience of 2.4 decades in banking, asset management, and various sectors. She is supported by a team of seasoned professionals.