AMP Capital has made its first Indian infrastructure debt investment with a commitment to co-finance up to 5.5 billion rupees ($74 million; €62 million) in non-convertible debentures for Indian listed toll road company Sadbhav Infrastructure Project Limited (SIPL).
The investment is intended to help SIPL fund the completion of nine toll road assets across India, currently under construction. The assets are part of the firm’s existing portfolio of road projects that includes four operational toll road assets in Maharashtra, Harayana and Gujarat.
The transaction is AMP Capital’s first investment in India under Infrastructure Debt Asia (IDA), the APAC-focused infrastructure debt strategy launched by the firm last year.
AMP Capital head of IDA Simon La Greca told Infrastructure Investor the hybrid annuity model – a public-private partnership structure designed to support the development of India’s road infrastructure and used in the nine toll roads under construction – had been a major factor in the firm’s commitment to co-financing the projects.
“The hybrid annuity model is basically a government way of granting a concession which gives investors cashflows from the project,” La Greca said. “Essentially it removes the patronage risk that might have been seen on some earlier toll road transactions in India, so it’s quite attractive to someone like us.”
La Greca said India would continue to be a core focus for the firm’s IDA strategy – along with other emerging countries in the region like Thailand, Indonesia and the Philippines – as it follows through on its infrastructure investment plans in the energy, transport, utilities and digital sectors across APAC.
“As an infrastructure investor with a focus in our new strategy on both emerging and developed Asia, India’s a really core market for us, so we’re really pleased to make this investment,” La Greca added.
La Greca declined to comment on the firm’s plans to raise an APAC-specific debt fund, but noted “the idea is to certainly raise capital under [the IDA] strategy which will be deployed in the region”.
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