Nomura Holdings plans to launch a $500 million India infrastructure fund in September, its country head said, joining the league of firms looking to play a role in financing infrastructure projects in Asia’s third-largest economy.
The fund, which will invest in Indian infrastructure projects, will mostly target investors in Japan, Vikas Sharma, president and chief executive of the Japanese investment bank’s India unit said.
“Infrastructure fund is an important piece of the asset class that we want to address. India requires huge amount of infrastructure spends in the next five to 10 years,” Sharma told Reuters in an interview.
Private equity investors are poised to play a faster-growing role in financing much-needed infrastructure projects in a country infamous for clogged roads and power outages and lacking a mature local bond market to provide long-term project funding.
Friendlier government policies are also helping to make building projects easier, though delays and red tape remain problematic.
Private equity investment in infrastructure in India has grown from about $1 billion in 2006 to $4 billion last year, a recent Bain & Company report found, predicting activity could grow 25-50 percent a year over the next three years.
In May, Morgan Stanley’s global infrastructure fund said it was investing up to $200 million in a joint venture with a unit of Spain’s Grupo Isolux Corsan, which holds rights to build three highway projects in India.