NIIF and PSP’s Roadis launch $2bn platform to invest in India’s roads

Under the initial agreement, the fund and PSP-owned highway operator Roadis will invest in new opportunities on a 50:50 basis.

India’s National Investment and Infrastructure Fund and Roadis, the highway operator owned by Canadian pension fund manager PSP Investments, have created a platform to invest up to $2 billion in operational road assets in India.

Roadis spokesman Eduardo Calvo told Infrastructure Investor that the joint venture would target brownfield and toll-operate-transfer model opportunities. However, he did not rule out investments in projects “that might bring capex investment attached”.

Calvo said the platform would remain unnamed and confirmed that both companies had agreed to evenly split the ownership of any investments the platform acquired: “Afterwards, depending on which specific investment opportunities arise, different investment formulas can be studied.”

Calvo said that Roadis already operates four assets in India, which will not be transferred to the new platform. He added that the joint venture had yet to acquire any assets.

“The partnership combines the capacity of two of the main players of the Indian market: NIIF’s investment capacity on one hand, and the operational expertise that Roadis has gathered during the last few years,” Calvo said.

An NIIF spokesman confirmed that the Indian government-backed wealth manager would be pursuing investments in the platform through its Master Fund. This vehicle primarily invests in operating assets in core infrastructure sub-sectors and has a target size of $2 billion.

NIIF is currently pursuing three strategies: the Master Fund; the Strategic Investment Fund, which invests in growth and development opportunities; and a fund of funds. Its aim is to invest in infrastructure in India that appears poised to benefit from the country’s rapid economic growth.

There has been increasing investment in India’s road sector in recent years. In 2018, the National Highway Authority of India tendered a bundle of nine roads under the toll-operate-transfer model, attracting bids from several international players. Macquarie Infrastructure and Real Assets won the auction after offering $1.49 billion for a 30-year concession, substantially exceeding the authority’s original target of $1 billion.

More recently, last month, Cube Highways, which was established In 2014 by I Squared Capital and the World Bank’s International Finance Corporation, entered into an agreement with Reliance Infrastructure Limited to acquire a 100 percent stake in the Delhi-Agra toll road, growing its portfolio to more than 4,500 kilometres across the country.