The Pakistan Credit Rating Agency Limited
04-May-21
Analyst
Muhammad Noor Ul Haq
noorulhaq@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | NBFC | Jun-20
- Methodology | Correlation Between Long-Term And Short-Term Rating Scale | Jun-20
- Criteria | Rating Modifier | Jun-20
Related Research
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PACRA Assigns Initial Entity Ratings to Infra Zamin Pakistan Limited
| Rating Type | Entity | |
|
Current (04-May-21 ) |
||
| Action | Initial | |
| Long Term | AAA | |
| Short Term | A1+ | |
| Outlook | Stable | |
| Rating Watch | - | |
Infra Zamin Pakistan Limited (IZP) is a recent initiative of the Private Infrastructure Development Group (PIDG). PIDG through group companies (InfraCo Asia Investments/ Indus Guarantees and GuarantCo) has partnered with Karandaz for taking this initiative forward. The shareholding structure plays a pivotal role in the assignment of rating. Developed by GuarantCo, IZP is to function as a for-profit credit enhancement facility. GuarantCo, rated AAA by PACRA, was established in 2005 and executed its first deal in Pakistan in 2013. The contextual experience of the local market dynamics will lend support to IZP. The business model envisages greater participation of the private sector needed for uplifting the infrastructure of Pakistan. IZP is expected to unlock the hidden potential of the local credit market by way of providing guarantees to reduce the implied credit risk. This will enable greater flow of capital to sectors like renewable energy, digital communication, waste water treatment, social infrastructure and more. The ensuing benefits to the economy at large are innumerable. License for the company has been issued, the CEO has been appointed, key executives have been hired and the company is well capitalized.
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 be very strong and gradually mature as the steps towards achieving commencement materialize.
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, two independent directors, and the CEO. The GuarantCo nominee will join in due course. Ms. Maheen Rahman assumed the role of CEO Infra Zamin Pakistan Limited on 1st Jan' 21 and her appointment as well as that of the Board of Directors has been approved by the Securities & Exchange Commission of Pakistan (SECP).