By Netty Ismail/Bloomberg
Singapore: 3i Group Plc, Europe’s biggest publicly traded buyout and venture capital firm, is teaming up with a government-owned finance company to help India build $320 billion of ports, power plants, roads and other projects.
London-based 3i signed an agreement with India Infrastructure Finance Co. Ltd to finance such projects in the world’s second-fastest growing major economy, the buyout firm said on 12 April.
India’s spending spree on infrastructure presents the biggest opportunity yet for private-equity investors that until now have focused on smaller technology and real-estate deals. Citigroup Inc., Blackstone Group Holdings LP and two Indian finance companies signed an agreement in February to start a $5 billion (Rs21,275 crore) fund to improve roads, ports and other utilities.
Prime Minister Manmohan Singh in October doubled his infrastructure budget to $320 billion by 2012, saying public facilities must be upgraded to raise growth to 10% from an average of about 8%. About $150 billion will come from partnerships with private companies, as India strives to cut its budget deficit.
3i’s investments with its new Indian partner will focus on power, ports, logistics, airports and road projects, the buyout firm said. The company is expanding in Asia, home to the world’s two fastest-growing major economies, as competition from other buyout firms intensifies in Europe.
3i invested $50 million in Mundra Port & Special Economic Zone Ltd in June, said Anil Ahuja, who heads 3i’s Indian business. Mundra Port, owner of India’s largest non-government cargo terminal, plans to raise as much as Rs18 billion ($420 million) in an initial stock sale, people with direct knowledge of the offering said in March.
India Infrastructure Finance was incorporated in January last year to provide financing for infrastructure projects in India, 3i said.