The world’s largest sovereign wealth fund, Abu Dhabi Investment Authority (ADIA), with investible funds of more than $600 billion (Rs 30,60,000 crore), has decided to invest in India’s ambitious Delhi-Mumbai Industrial Corridor (DMIC) and other infrastructure projects.
ADIA will set up either a wholly-owned subsidiary or a joint venture with Indian financial institutions such as IDFC or IL&FS for long-term investment in infrastructure.
The 1,483-km DMIC project will run through seven states —Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat and Maharashtra — will come up along the proposed Delhi-Mumbai dedicated rail freight corridor.
AIDA’s investment will go into creating seven new cities in six states including Gujarat, jointly held by Infrastructure Leasing and Financial Services (IL&FS) and Infrastructure Development Finance Company (IDFC).
A fund will be established as a trust which would be empowered to raise long-term debt finance at attractive rates from institutions and also raise tax-free bonds. “AIDA may contribute to the DMIC Project Implementation Fund, which is being set up as a Trust, by way of equity or debt. This will nullify investment risks,” a commerce ministry official said after a meeting between commerce and industry minister Anand Sharma and ADIA managing director Sheikh Hamed Bin Zayed Al Nahyan.
“We have invited ADIA to invest in DMIC and other infrastructure projects,” Sharma said after the meeting. “ADIA will work with India in the DMIC project... We have agreed to set up a joint working group to work out the modalities.”
AIDA’s investment in DMIC is expected to be announced during the visit of Abu Dhabi’s crown prince Sheikh Mohammad Al Nahyan later this year, the official said.
Rich Arab investors and wealth funds are increasingly turning to emerging economies such as India for better returns on their investments, away from crisis-hit European economies.