NIIF, PSP form $2b India toll road investment platform
The Indian government-backed National Investment & Infrastructure Fund (NIIF) has teamed up with Canada's Public Sector Pension Investment Board (PSP Investments) to launch a platform that will invest up to $2 billion in local toll road projects.
The platform will bid on projects under the toll-operate-transfer (TOT) model, under which the government awards private-sector bidders toll collection rights and maintenance obligations for 30 years. Projects under this model are awarded as bundles of operational highways, which helps buyers offset the risks of any particular project, as well as ensuring that successful bids are not limited to companies with construction expertise.
PSP is participating through Roadis, a subsidiary that invests in transportation infrastructure. It has more than EUR3.4 billion ($3.8 billion) in assets and manages nearly 2,000 kilometers of toll roads worldwide, more than a third of which are in India. The rest of its highway assets are in Mexico, Brazil, Spain, and Portugal; it also owns a stake in a wind energy project in Texas.
“The road network is a key enabler for the Indian economy to grow and sustain its position as the fastest growing major economy in the world, and this provides significant upside potential for investments, while creating value for users,” said Sujoy Bose, managing director and CEO of NIIF, in a statement. “We are delighted to partner with Roadis, which brings global expertise and has the ability and interest to invest substantial capital in India.”
NIIF was launched in 2015 with the goal of raising about INR400 billion ($5.8 billion) for investments in transportation, energy, and urban infrastructure. The fund invests across greenfield and operating projects, with commitments including the purchase of a controlling stake in logistics company Continental Warehousing alongside DP World and the acquisition of infrastructure-focused non-banking finance company IDFC Infrastructure Finance.
NIIF’s vehicles comprise a mother fund and several subsidiary funds. Investors include Temasek Holdings, the Abu Dhabi Investment Authority, and the Asian Infrastructure Investment Bank. The funds have raised over $3 billion since NIIF’s launch.
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