India-UK announces GBP240M Green Growth Equity Fund
City of London is set to play a bigger role in India’s Green Infrastructure Projects with funding from its pool of investors, inclusion in major indices, strong sectoral and emerging markets expertise and access to international capital.
Supporting this role, the United Kingdom and the Indian government has announced a joint GBP240 million Green Growth Equity Fund
Under the US$3 billion National Investment and Infrastructure Fund (NIIF).
NIIF is to catalyze capital from international and domestic investors into infrastructure and allied sectors in India.
India and the UK announce joint UK-India Fund, namely a Green Growth Equity Fund; Aims to leverage private sector investment from the City of London to invest in Green Infrastructure Projects in India;
Both Governments reaffirmed their commitment to anchor invest up to £120 million each (i.e. totally £ 240 million) in the Joint Fund which will be established under the NIIF framework.
“India and the UK announced the launch of an Early Market Engagement for the joint UK-India Fund, namely a Green Growth Equity Fund which aims to leverage private sector investment from the City of London to invest in green infrastructure projects in India,” said a media note from the Press Information Bureau.
“Both governments reaffirmed their commitment to anchor invest up to GBP120 million each (i.e. totally GBP240 million) in the joint fund which will be established under the NIIF framework,” it said.
To begin with, the fund aims to raise around GBP500 million, with the potential to unlock much more in future.
This was announced at the bilateral meeting between Finance Minister Arun Jaitley and Chancellor of the Exchequer Philip Hammond in New Delhi on 5 April 2017.
The ministers said initial investments will focus on India’s rapidly growing green energy and renewable market.
A Fund Manager is expected to be selected in the next few months.
NIIF is to catalyze capital from international and domestic investors into infrastructure and allied sectors in India.
Progress will be accelerated through early market engagement via the publication of a blueprint, with the aim to identify additional and complementary sectors for fund investments, said the note.
A component of NIIF’s investment strategy will be to anchor equity, quasi-equity and debt funds in partnership with investors targeting investments in the relevant sectors in India.
NIIF will operate on the basis of three principles in implementing this strategy: commercial, additional and in partnership with others.
The government is keen to leverage investments from or via the City of London.
The purpose is to help India enhance inclusive growth by boosting investment into green infrastructure on commercial terms. The success of the Fund will crowd in private investment that will have a transformational impact on India’s development.
A secondary purpose is to promote the City of London as an important option for the government to raise capital from global markets, including UK investors, for India’s growth.
The governing principles for the Fund are:
a. Developmental (i.e. for the purpose of inclusive economic growth)
b. Sustainable (i.e. commercially viable)
c. Replicable (i.e. attract investors to successive funds)
d. Leverageable, attracting both Indian, UK based and global capital into the fund as well as into investee companies/projects
e. Governed in line with best practice
C. Proposed concept: Green Growth Equity Fund (GGEF)
The Fund will invest in mid to large-sized companies in the green infrastructure space in India. fii-news.com
