Blackstone enters Indian infrastructure

The private investment giant will team with Citigroup and India’s Infrastructure Development Finance Company to raise $5 billion for infrastructure investment in India.

The Blackstone Group will team with Citigroup and India’s Infrastructure Development Finance Company to form a $5 billion (€6.5 billion) fund for Indian infrastructure investment, according to a press release from India’s finance ministry.

Blackstone has not released a statement on the agreement.

According to the Ministry of Finance statement, Citigroup and Blackstone will initially commit $250 million to the fund and raise the remainder from Indian and foreign investors. State-owned India Infrastructure is also expected to contribute to the fund.

The $5 billion-target fund will be comprised of $2 billion in equity and the remainder in debt. The fund will target investment in roads, power sources and airports.

“This initiative is an important milestone in our search for innovative solutions to meet the vast challenge of financing the development of India’s burgeoning infrastructure sector,” Palaniappan Chidambaram, India’s finance minister, said in the statement.

Chidambaram has been a vocal proponent of increase infrastructure investment in India, saying it will help drive economic growth and reduce poverty in the country.

Blackstone opened an office in Mumbai in 2005, now led by Akhil Gupta, the former chief executive for corporate development at Reliance Industries and Reliance Infocomm. At the time, the firm announced plans to invest $1 billion in the country.

The firm has also acquired The India Fund, a mutual fund management company.

Last year, The Carlyle Group launched in infrastructure investment platform, while Goldman Sachs raised a $6.5 billion vehicle. JPMorgan is reportedly in the market with an infrastructure vehicle of as much as $1 billion. Australia’s Macquarie Bank is already a leading infrastructure investor globally.