Mumbai, April 29: Tata Group is forming a joint venture with private equity firm Actis that could invest about USD 2 billion over five years in building roads, a newspaper said on Thursday.
Unlisted Tata Realty & Infrastructure, a company set up to construct roads and highways, will own 65 percent of the joint venture TRIL Roads Pvt Ltd and Actis will own the remainder, the report said quoting Tata Realty’s Managing Director and Chief Executive Sanjay Ubale.
Actis will pay USD 77.5 million to buy the stake in TRIL Roads and Tata Realty will invest USD 122.5 million in the venture, the report said.
For Actis, which manages a USD 750-million infrastructure fund, this is the first investment in Indian infrastructure sector, the report said quoting the private equity firm’s partner Michael Till.
Italy’s biggest toll operator Atlantia, which is a technical partner of Tata Realty, has agreed to invest USD 200 million to pick up a stake in special purpose vehicles to be floated for setting up the projects, the paper cited Ubale as saying.
About USD 300 million will be available from the Indian government as viability gap funding and the remaining USD 1.3 billion will be raised from financial institutions, the report said.
Viability gap funding is the money put in by the state to close the gap between the cost of an infrastructure project and the money private investors are willing to spend.
–Agencies