Macquarie raises $1bn for Indian infrastructure

SBI, Macquarie and IFC each committed $150m to the fund while the rest was raised from international investors.

The Macquarie-SBI Infrastructure Fund (MSIF) has raised $1 billion (€740 million) to invest in infrastructure projects in India.

The State Bank of India (SBI), Australian investment bank Macquarie Group and the World Bank’s  International Finance Corporation (IFC) each committed $150 million to the fund as sponsors. The remainder was raised from international investors, according to a statement from the State Bank of India.

The fund will continue to raise capital through 2009 and aims to raise between $2 billion and $3 billion, the bank said. The fund was targeting $2 billion when it began fundraising in April 2008.

MSIF will invest in traditional infrastructure assets in India such as roads, sea ports, airports, power generation, transmission and distribution. Its investments will include greenfield projects as well as operating businesses.

The fund is a joint venture between SBI, Macquarie and IFC. SBI and Macquarie each holds a 45 percent stake in the fund, while IFC holds the remaining 10 percent.

It is the latest in a string of large infrastructure funds that have come to market in recent months in response to the country's burgeoning infrastructure need, which its government has estimated at $500 billion through 2012.

In January, SBI and the state government of Gujarat reportedly agreed to create an INR50 billion ($999 million; €740 million) fund to invest equity in infrastructure projects in the state.

The India Infrastructure Fund, a joint venture between the Indian government, Citi and India’s Infrastructure Development Finance Company, also aims to raise $5 billion in debt and equity to invest in the country’s transport, telecommunications infrastructure and power sectors.

In April 2008, 3i raised $1.2 billion for its India Infrastructure fund, exceeding its $1 billion target.