India's IDFC, Russia's RDIF to invest $1b in infrastructure

Each party will contribute $500 million to the initiative. The deal was announced during Russian President Vladimir Putin's official visit to India. The two countries have pledged to deepen economic and trade ties - setting a target of trebling bilateral trade to $30 billion by 2025 - and agreed to cooperate on oil and gas exploration, petrochemicals and infrastructure.

Separately, RDIF also signed an agreement with Tata Power to cooperate on energy sector investments in Russia. The sovereign fund is particularly interested in leveraging Tata's experience in renewable energy production.

Speaking of the alliance with IDFC, Kirill Dmitriev, CEO of RDIF, said in a statement that the fund would benefit from its partner's project management expertise.

"Our partner's experience in such areas as large scale concession projects specifically in transport infrastructure will be invaluable on growing Russian infrastructure market. We are certain that this partnership will contribute to the strengthening of Russia and India's relationship by promoting cross-border investments and economic cooperation adding to the growth and prosperity of the two nations," he added.

RDIF was established in 2011 with a pledge of about $10 billion in Russian government funds over an initial five-year period. The fund is supposed to secure an equal contribution from a co-investor for each deal it makes, with a view to acting as a catalyst for the direct investment into Russia.

RDIF already has a joint investment platform with China Investment Corporation (CIC), with the two sovereign wealth funds committing $1 billion apiece and the remainder to be sourced from Chinese institutional investors. The Russia-China Investment Fund will commit at least 70% of its corpus in Russia and former Soviet states, with the balance earmarked for China-based ventures.

Last year, RDIF entered into a similar arrangement with Korea Investment Corporation (KIC), with each side committing an initial $250 million to a joint investment platform. It is hoped the fund will reach $1 billion in size.

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• Topics
• Infrastructure
• Infrastructure
• South Asia
• RDIF
• IDFC Private Equity
• India
• Infrastructure
• Russia