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Citigroup and Blackstone Group bet $5 B on India
By siliconindia
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Friday, 16 February 2007, 18:30 IST
NEW DELHI: U.S based Citigroup Inc. and Blackstone Group joined two Indian finance companies to announce the launch of a US$5 billion fund that will help build roads, ports and power plants in the country.
IDFC, Citigroup and Blackstone will together invest US$250 million for the initiative and the rest is expected to come from international and domestic firms interested to invest in Indian infrastructure projects, said a statement issued by the Indian finance ministry. It gave no details on individual contributions.
"The plan is to deploy about US$2 billion (1.5 billion) in equity capital and US$3 billion (2.3 billion) in long-term debt financing with maturities exceeding 10 years," the statement said.
The equity financing program will be managed by IDFC, which will invest in new and ongoing roads, power, airport and power projects, it said. "This initiative is an important milestone in our search for innovative solutions to meet the vast challenge of financing the development of India's burgeoning infrastructure sector," the statement quoted Chidambaram as saying.
India needs huge investment in infrastructure to support its booming economy, which is growing more 8 percent annually, but most domestic financial companies either lack the resources or the expertise to fund long term projects on such a scale.