Two sovereign vehicles respectively owned by Russia and India have agreed to set up a $1 billion joint fund that will invest in Russian businesses operating in India.
The Russian Direct Investment Fund and India’s National Investment and Infrastructure Fund (NIIF) will each contribute $500 million to the new structure.
The Russia-India Investment Fund will aim to invest in 20 projects with ticket sizes of $50-$150 million in the next three to four years, according to reports. It will focus on power generation, particularly small-scale hydroelectric projects, as well as the Indian automobile and petrochemical sectors.
The bilateral investment fund is one of several partnerships between the two countries. In 2012, RDIF agreed to work with State Bank of India to jointly invest up to $2 billion through a co-investment platform in projects and companies relevant to both India and Russia. RDIF set up similar partnerships with Indian utility TATA Power and financial institution IDFC in 2014 with a view to invest in infrastructure projects in Russia and India.
Russian development institution RUSNANO has also agreed to invest in NIIF, which is seeded with INR200 billion ($2.99 billion; €2.75 billion).from the Indian government. New Delhi owns a 49 percent stake in the fund and has been looking to raise the remaining equity from international investors. The vehicle has so far secured support from the Qatar Investment Authority and Abu Dhabi Investment Authority.
The $6 billion vehicle, which was set up last December, identified its debut projects in July. These include Konkan Railways as well as a grid scheme and several road projects.