The joint Russian-Indian fund to invest in Russian companies in India
An investment fund, founded by the national funds of India and Russia, is planning to invest $1bn in Russian companies expanding to India and thus to attract $10bn from third party investors. Energy, machinery, petrochemical and other sectors are to be involved. The fund already has proposals from about 20 companies, including KAMAZ.
Russia and India are planning to create a $1bn joint investment fund, reports The Times of India. An agreement to set up the new fund was signed during the 8th BRICS summit in Goa, India on 15 October. The joint project will be undertaken by National Investment and Infrastructure Fund (NIIF) of India and Russian Direct Investment Fund (RDIF). It is expected that RDIF and NIIF will contribute $500 million each for investing in Russian companies operating in India.
The fund is supposed to have an investment horizon of seven years and is planning to examine projects ranging from $50 to $150 million. RDIF already has about 20 potential investment proposals. 'We are interested to invest in infrastructure and other sectors of Indian economy,' said Kirill Dmitriev, CEO of RIDF, in his interview to CNBC-TV18. 'We will be targeting companies that are interested to work jointly in India in construction of energy facilities, including small hydro plants, in construction of other key infrastructure areas.'
Automotive and transport companies are another area of interest for RDIF. 'KAMAZ is interested in setting up a company in India and we will be interested to invest in that. There is a big interest for us in the transport machinery sector and in petrochemicals,' said Dmitriev.
RDIF is also investing in the first project funded by the New Development Bank (BRICS Bank), which supports the construction of small hydroelectric power stations in Karelia, Russia. 'We would like to fund similar hydro projects in India,' said Dmitriev. RDIF used the same model to invest in Russian companies in partnership with Chinese, Saudi Arabian and Kuwaiti investors.
Although the new fund manages the total amount of $1bn, it can attract another $10bn of investments from Russian companies and banks, believes Dmitriev. He also expects Indian partners to participate. 'Our goal is to have 15-20 investments done in the next 3-4 years to really showcase Russia-India cooperation to create growth stories in India. But we are also open to participate in all sorts of sectors of Indian economy, we really very much believe in technology sector that is growing very fast.'
Besides the MoU on setting up a collaborative investment fund, another 15 agreements between India and Russia were signed during the summit, covering business cooperation, as well as scientific and military projects. Earlier it was announced that India and Russia can establish a 'Green Channel' for facilitating customs procedures between the two countries.