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US Pension Funds, PE Players Bet On Indian Highways

18 September, 2009
On a four-nation (London, New York, Singapore and Zurich) roadshow to hardsell the India infrastructure story, roads and highways minister Kamal Nath has expressed confidence that overseas investors including US funds were keen to invest $10 billion over the next three years. A Bloomberg report, quoting Nath, said, while buyout funds may finance road-building, pension funds may look at the post-construction phase.  
 
A recent Global Economics Paper by Goldman Sachs projects Indian’s infrastructure funding needs over the decade at $1.7 trillion. It also says that India’s growth is directly linked to how quickly the country puts infrastructure projects on the fast-track. The country embarked upon its National Highway Development Programme of connecting all metros and the north-south-east-west corridors a decade back.
 
Now, the plan is to set up expressways (18,000 km), mega projects (above $1-billion in size) and upgrade over 6,000 km. In fact, the World Bank has come forward to provide a $3-billion loan for highway development. The government is bullish that the private sector will contribute to nearly $45 billion of the $80-billion programme.
 
It appears that the private sector is more than happy to lap up the opportunity. A PTI report, quoting ICICI Bank CEO Chanda Kochhar, says, the $20-billion road programme offered an attractive opportunity for both equity and debt investors. “The roads asset is an asset-class that provides a very steady and stable return to investors,” she said, in the report.

 


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US Pension Funds, PE Players Bet On Indian Highways

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