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India: India Infrastructure Fund

SUMMARY

STATUS
Approved
ECONOMY
India
SECTOR
Financial Institution
E&S CATEGORY
FI
PROJECT NUMBER
000022

FINANCING

PROJECT TYPE
Nonsovereign
APPROVED FUNDING
USD150 million
FINANCING TYPE
Stand-alone

TIMELINE

CONCEPT REVIEW
February 17, 2017
APPRAISAL REVIEW/FINAL REVIEW
May 8, 2017
FINANCING APPROVAL
June 24, 2018
LOAN CLOSING/LAST DISBURSEMENT
March 1, 2029

OBJECTIVE

The objective is to support mid-cap infrastructure projects in India by creating a mechanism to mobilize private capital from global long-term investors such as pension funds, endowments and insurance companies. Through its investment in the Fund, the Bank enhances its development impact by increasing the number of investments the Bank can transact. It also provides the Bank with an effective way to deploy capital by allowing the Bank to make investments that it would not have been able to execute on its own. Moreover, the Bank expects long-term income and capital gains not only from providing capital to the Fund, but also from participating in Fund coinvestment and co-financing opportunities.

DESCRIPTION

The Fund’s investment strategy is to invest in infrastructure platforms and infrastructure services companies with high growth potential that derive their revenues principally from India. The targeted investments cover a number of sectors, including the following examples and related sectors:

Energy and utilities (e.g. renewable energy, electric transmission and distribution networks, water and wastewater systems, smart cities, etc.).

Transportation and logistics (e.g. roads, airports, bridges, tunnels, ports, railways, waterways, intermodal systems linking various transport modes, urban transport, logistics and logisticsrelated infrastructure, etc.).

Other sectors including telecommunications, broadband, urban PPP projects, healthcare and education.

The Fund will seek to invest in portfolio companies that support and benefit from overall growth in India’s infrastructure development and will target a market rate of return reflecting the risks of the investment, principally through long-term capital appreciation. All investments by the Fund will be guided by an assessment of government policies and prospects for private sector infrastructure investment. The Fund seeks to identify and partner with capable, trustworthy sponsors and management teams.

Information relating to the Fund and GP is based on information supplied by the GP but this project summary information is not prepared or approved by such GP. Expected performance of the Fund is not necessarily a guide to the eventual outcome.

PROJECT FINANCING

For more information about project financing, please review the project summary.

ENVIRONMENTAL AND SOCIAL INFORMATION

The Project is categorized FI, because the financing structure involves the provision of funds through a financial intermediary, whereby the Bank delegates the decision-making on the use of the Bank funds, including the selection, appraisal, approval and monitoring of investments. The Fund has established a system for reviewing and managing environmental and social risks in line with both Morgan Stanley’s corporate environmental and social requirements and the Bank’s Environmental and Social Policy. The system encompasses screening and categorizing potential investments as Category A, B or C, and reviewing, conducting due diligence on, and monitoring the environmental and social risks and impacts associated with the investments, all in a manner consistent with the Environmental and Social Policy of the Bank. The Fund is also subject to: (i) the Environmental and Social Exclusion List and applicable host country national laws for all investments; and (ii) the applicable Environmental and Social Standards of the Bank for the investments that are classified as Category A, and if the Bank so determines, some or all of the investments that are classified as Category B. Portfolio companies are required to prepare environmental and social documentation, conduct disclosure and stakeholder engagement, as well as maintaining a grievance mechanism, and report to the Fund on relevant environmental and social performances on a regular basis. The Fund is required to develop and maintain adequate capacity to manage the environmental and social risks associated with the activities of its investments, and will provide the environmental and social due diligence reports on its first three potential investments to the Bank as well as for all Category A investments before the investment decision.

PROJECT TEAM LEADER

Ruben Hideo Noguchi

Senior Portfolio Monitoring Specialist

rubens.noguchi@aiib.org

 

BORROWER

N/A

IMPLEMENTATION AGENCY

Morgan Stanley: Raja Parthasarathy

Managing Director

raja.parthasarathy@morganstanley.com

S.G. Shyam Sundar

Managing Director

shyam.sundar@morganstanley.com

 

PROJECT DOCUMENTS

CLIENT/COFINANCING PARTNER DOCUMENTS

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