DP World, NIIF create platform; to invest up to $3 billion in ports

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Global operator of marine and inland terminals DP World today joined hands with National Investment and Infrastructure Fund to create a platform for investing up to USD 3 billion in ports and logistics.

This is the first ever investment by National Investment and Infrastructure Fund (NIIF).

“NIIF and DP World announce the creation of an investment platform to invest in ports, terminals, transportation and logistics businesses in India. The platform will invest up to USD 3 billion of equity to acquire assets and develop projects in the sector,” the port operator said in a statement.

Hailing the move, the finance ministry said the government is pleased to take note that the NIIF has made its first investment today

It said NIIF has partnered with DP World to create an investment platform for ports, terminals, transportation and logistics businesses in India, and the platform will invest in opportunities in the ports sector, and beyond sea ports into areas such as river ports and transportation, freight corridors, port-led special economic zones, inland container terminals, and logistics infrastructure.

The first close of the NIIF Master Fund took place on October, 16, 2017 with contributions from a subsidiary of Abu Dhabi Investment Authority (ADIA) and four Domestic Institutional Investors (DIIs) – HDFC Group, ICICI Bank, Kotak Mahindra Life and Axis Bank.

An India-UK Green Growth Equity Fund (GGEF) is also being set up under the fund of funds vertical of NIIF, and will have anchor commitments of GBP 120 million each from Government of India (through NIIF) and Government of UK.

Subhash Chandra Garg, Secretary, Department of Economic Affairs (DEA), Ministry of Finance said, “NIIF, set-up to function as a major platform in India for attracting foreign investments, has made good progress. We are pleased to learn of NIIF’s first investment to create an investment platform in the ports and logistics sector. Following its First Close in October 2017 on the fund-raising side, and now with its first investment, NIIF is making visible progress”.

The NIIF is being operationalised by establishing three Alternative Investment Funds (AIFs) under the Sebi Regulations. The proposed corpus of NIIF is Rs 40,000 crore (around USD 6 Billion).

“GOI’s contribution to the AIFs under the NIIF scheme shall be 49 per cent of the total commitment. NIIF has mandate to solicit equity participation from strategic anchor partners, like overseas sovereign/quasi-sovereign/multilateral /bilateral investors,” the ministry said.

Meanwhile, DP World said its partnership with NIIF follows the memorandum of understanding (MoU) signed in May 2017 and the India visit of Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed Al Nahyan and DP World Group Chairman and CEO Sultan Ahmed bin Sulayem in February 2016.

The platform will also look at opportunities beyond sea ports, such as river ports and transportation, freight corridors, port-led special economic zones, inland container terminals and logistics infrastructure, the statement said.

Sultan Ahmed bin Sulayem said, “We believe that our expertise in building best-in-class logistics infrastructure together with the NIIF’s local knowledge and government partnership is the right combination to take advantage of the significant growth opportunities in India”.

NIIF CEO Sujoy Bose said the company will aim to reduce the cost of moving cargo between port and origin/destination.

“This is NIIF’s first investment and is a good example of how NIIF can work with international capital and expertise to invest at scale to build critical infrastructure in India”.

In May last year, DP World had pledged USD 1 billion investment in India to tap into the opportunities the country offers in infrastructure space. This was in addition to its existing over USD 1 billion investment in the country.

The announcement was made at India Integrated Transport & Logistics Summit 2017.moneycontrol