Morgan Stanley Infrastructure Partners, the $4 billion infrastructure fund managed by investment bank Morgan Stanley, has entered into a joint venture with the concessions arm of Spanish infrastructure group Isolux Corsan to invest in the Indian transport sector.
The $400 million joint venture had been rumoured for several months and will see each of the partners contribute $200 million to it. The new partnership already has $1.6 billion of highway projects under construction, amounting to three build-operate-transfer contracts awarded as part of the National Highways Authority of India’s (NHAI) roads refurbishment programme. Isolux has also qualified to bid for several other road projects, the partners said.
NHAI’s roads refurbishment programme is one of the world’s largest public-private partnership (PPP) programmes in procurement and is estimated to total $50 billion once it is completed.
“The joint venture with Isolux adds to our successful presence in India’s transportation sector, providing us with an excellent platform in a market experiencing rapid urbanisation and dramatic growth in vehicles,” said Gautam Bhandari, head of Morgan Stanley Infrastructure Asia. According to data from Euromonitor and Morgan Stanley, India is the second-fastest growing auto market in the world, having registered double-digit growth in vehicle registrations over the last decade.
Antonio Portela, chief executive of Isolux, expects the new joint venture to “create a best-in-class road portfolio company in the years to come”.
Morgan Stanley’s deal with Isolux marks at least the second Indian investment for the global infrastructure fund, which closed on $4 billion in May 2008. Last March, the fund teamed up with private equity investors General Atlantic, Norwest Venture Partners, Everstone Capital and Goldman Sachs Investment Management to invest $425 million in Asian Genco, a Singapore-based infrastructure developer with a large portfolio of power assets in India.
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