Infrastructure has been one of the key pillars of the ‘India story’ over the past several years and is expected to remain so in the next decade. Crisil estimates that about ₹80-85 trillion in capital expenditure will be made in this sector between 2022-23 and 2026-27. Debt, typically contributing about 70% of the project funding requirement, is expected to play a key role. Given the scale of the funds required, embracing risk-based pricing can help mobilize finance at an optimum cost. Probability of default (PD) and loss given default (LGD), which are two fundamental components of credit risk assessment, can play a crucial role in evaluating risk and determining loan pricing.