Russia-Kuwait consortium signs mandate for $1bn infrastructure fund

Moscow based investor VTB Group, energy company Inter Rao Ues and Kuwait based Fouad Alghanin & Sons Group of Companies are to target electricity related infrastructure projects through a jointly launched and managed investment fund.

Russia’s VTB Group, Inter Rao Ues and Kuwait’s Fouad Alghanin & Sons Group of Companies are to team up to create and manage a $1 billion infrastructure fund.

According to a statement released by the trio today, the three parties signed a memorandum of understanding to form a fund which aims to invest in the development and construction of electricity generating and related infrastructure projects in Russia, former Soviet Union states and Arabian Gulf countries. This investment horizon may be stretched to include other countries also, the three companies said.

No equity target was officially announced by the three companies but according to a report by Reuters, the fund is seeking to have up to $1 billion in assets under management ultimately.

According to the report, the fund is already considering projects in Jordan and Syria and that further projects in North Africa would also be considered.

Evgeny Dod, chairman of the management board of Inter Raoues, said: “We are constantly looking forward to cooperation with foreign partners in terms of joint electricity generation projects, efficient investments and business diversification. We consider the memorandum of understanding signed today as the platform for execution of the projects in Middle East, Russia and other countries that could be prospective and beneficial to all of the parties”.

VTB  Group’s interest in the fund will be lead by VTB Capital, its Moscow-based investment business arm which invests in a range of different sectors.

Inter Rao Ues is a Moscow-based energy company with electricity generating and distributing assets across Russia and internationally and Fouad Alghanim & Sons Group of Companies is a Kuwait-based investor which has investment s in areas such as shipping and aviation as well as engineering and real estate.