DP World, India’s NIIF to set up $3 billion investment platform
The DP World-NIIF investment platform will invest up to $3 billion in ports, terminals, transportation and logistics businesses in India
Mumbai/New Delhi: The National Investment and Infrastructure Fund (NIIF), India’s first sovereign wealth fund, and Dubai-based ports operator DP World Pvt. Ltd, on Monday, announced the creation of an investment platform to invest up to $3 billion in ports, terminals, transportation and logistics businesses in India.
This is the first investment platform from NIIF and will see investment up to $3 billion of equity to acquire assets and develop projects in these sectors, the companies said in a joint statement.
The platform will also look at opportunities beyond sea ports such as river ports and transportation, freight corridors, port-led special economic zones, inland container terminals and logistics infrastructure, including cold storage.
The formation of partnership follows the memorandum of understanding signed in May 2017 and the visit to India by Sheikh Mohammed bin Zayed al Nahyan, crown prince of Abu Dhabi, and Sultan Ahmed bin Sulayem, chairman and CEO of DP World Group, in February 2016.
According to bin Sulayem, the expertise of DP World in building logistics infrastructure, together with the NIIF’s local knowledge and government partnership, will be the right combination to take advantage of the significant growth opportunities in India. “We are proud to partner with NIIF and share our expertise and experience in these areas and the global supply chain to provide cost-effective logistics and warehousing solutions to India’s growing economy and trade,” said bin Sulayem. With a portfolio of 78 operating marine and inland terminals, DP World, majority owned by the Dubai government, is the world’s fourth biggest container port operator.
According to Sujoy Bose, chief executive of NIIF, efficient logistics and cargo movement are critical components for the continued growth and development of the Indian economy, particularly the manufacturing sector. “We are delighted to partner with DP World to create a platform which will aim to reduce the cost of moving cargo between port and origin/destination. This is NIIF’s first investment and is a good example of how NIIF can work with international capital and expertise to invest at scale to build critical infrastructure in India,” added Bose.
The announcement comes in conjunction with UAE ambassador Ahmed al Banna’s trip to New Delhi, during which he said the UAE will be investing $1-1.5 billion in India this year.
The investment, which will be made in sectors such as logistics, dry ports and port management, is an outcome of a visit to the UAE by commerce minister Suresh Prabhu last week, said the ambassador.
During prime minister Narendra Modi’s visit to the UAE in 2015, the two sides had agreed on the setting up of a multi-billion dollar fund to tap into investment opportunities in the country’s infrastructure sector.
Under the terms of the pact, Abu Dhabi Investment Authority will invest $75 billion in India over a 10-year period. Out of the total, an amount of $1 billion has already been transferred to NIIF. The funds will be invested in roads and railway projects, added al Banna.
Set up in 2015, the Indian government had created NIIF to catalyse capital from international and domestic investors into energy, transportation, housing, water, waste management and other infrastructure and allied sectors in India. NIIF’s strategy includes anchoring equity, quasi-equity and debt funds in partnership with investors targeting investments across the relevant sectors in India.
Besides this, India and the UAE discussed some “legacy issues” in the area of UAE investments in India, al Banna said.
UAE companies like Etisalat, Emaar and DP World had faced investment related issues in India, al Banna said, adding that in the case of DP World “there has been a major breakthrough”, though he did not go into the details. “But we still have the issue of Etisalat,” he said, referring to the legacy issues.
Al Banna confirmed that Prime Minister Narendra Modi will be travelling to the UAE next month for a summit on global governance.
Editor's Picks »
- Motherson Sumi continues to face margin pressure in foreign markets
- What the Warren Buffett indicator tells us about market valuations today
- Jet Airways lands with a thud in Q4 as fuel costs increase
- IBC amendments: Some dilutions, and a lot more speed
- Patanjali’s gambit is paying off in toothpaste wars