India looks to $10-bn infra investments from London funds – Infrastructure News

India is looking to attract investment commitments to the tune of $10 billion from funds parked in the City of London in marquee projects, including highways stretches and the National Capital Region’s rapid transport systems, by next year.

These “initial” investments from London-based fund houses will herald large-scale influx of “patient capital” in the country’s burgeoning infrastructure sector, official sources said.

Earlier this month, a team led by Niti Aayog CEO BVR. Subrahmanyam met fund houses in London to discuss the “huge potential” in India. An agreement on the Financing Bridge was signed between the City of London Corporation and the Niti Aayog on September 11 last year to tap a part of the trillions of dollars managed by London-based asset managers into Indian projects.

In the initial phase, the London funds would be encouraged to participate in bids for the National Highways Authority of India’s 8-10 projects and three multimodal hubs of National Capital Region Transport Corporation (NCRTC) at Anand Vihar, Sarai Kale Khan and Ghaziabad. The network has been planned and spatially oriented to ensure seamless integration with the Indian Railways, Inter-State Bus Terminals (ISBTs), Airports and the Delhi Metro.

“The aim is to deliver 4-6 marquee projects with the participation of a few big international players. Then they will become demonstration projects,” a senior official said, adding that these same project financing models would be replicated in other projects.

Currently, India largely finances infrastructure projects through domestically available funds including government budgets.

A few global funds such as Canada Pension Plan Investment Board (CPPIB) have already heavily invested in India. For instance, CPPIB has invested around $30 billion including 10 billion in infrastructure in India.

The government wants more global funds to invest in India given the large gap of trillions of dollars of requirement for India’s infrastructure development to sustain high economic growth.

“We want some marquee projects to be bid out by May-June next year,” the official said, adding that 99% of the investors’ concerns have been addressed including land issues, bidding documents, environmental, social, and governance (ESG) issues. Target is to bring investors in greenfield projects, who could reap maximum benefits in the long run.

Even though London is the world’s second-largest financial services centre with trillions of dollars in investible funds, the majority of asset managers there don’t invest in India due to information gaps in Indian infrastructure projects.

A team of from the City of London will be in India in November to visit some project sites for a first-hand assessment of transport hubs.

The Centre is also currently in discussion with a host of countries about attracting FDI, which has seen a decline in recent times. Net FDI inflows to India declined to USD 26.5 billion in FY24 from USD 42 billion in FY23.