Infrastructure lender IIFCL is toying with the idea of providing 'project completion risk guarantee' as a new product, its Chairman & Managing Director S.B. Nayar has said.

"It's a new product we are looking at. Already, talks are on with the Asian Development Bank. It is at the development stage," Nayar told BusinessLine here.

Over the last few years, several infrastructure projects have been stalled for various reasons including land, environmental concerns, law and order, etc. Many of the factors were beyond the control of the developers.

IIFCL is of the view that a 'project completion risk guarantee' facility could provide comfort to lenders, who are now faced with increased non-performing assets in the infrastructure space.

ADB has agreed to fund a study for this purpose and various issues around such a product are being discussed with various stakeholders, including IIFCL.

Indications are that a separate company would be set up by IIFCL for this purpose and ADB may be open to pick up equity in this venture, according to senior IIFCL officials.

The primary goal of a completion guarantee is to provide financial support to lenders for construction risks.

Net surges 47% to Rs 765 cr

Meanwhile, IIFCL on Wednesday reported a 47 per cent increase in net profit for the financial year ended March 31, 2015, at Rs 765 crore (Rs 521 crore).

Under the direct lending scheme, IIFCL had sanctioned Rs 7,737 crore in 2014-15, an over 200 per cent increase year-on-year.

Nayar attributed the surge in bottomline during 2014-15 to increased credit growth of nearly 10 per cent. For the current fiscal, IIFCL is eyeing credit growth of 14-15 per cent, he said.

srivats.kr@thehindu.co.in

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