Govt to set up core funds to woo West Asia

The government plans to set up infrastructure equity funds to attract investments from West Asia.

The department of economic affairs in the finance ministry is talking to the Infrastructure Leasing & Financial Services Ltd, IDFC and the India Infrastructure Finance Company Ltd for participation in these funds.

The funds will be set up under overarching country-to-country agreements for real estate, energy, fertilisers, hospitality, petroleum and ports, among others.

The decision was taken at a meeting held earlier this month at the Prime Minister's Office, chaired by PM's Principal Secretary T K A Nair.

The Ministry of External Affairs, in consultation with the finance ministry, will shortly move a Cabinet note seeking approval for these funds to sign agreements with West Asian governments.

The broad plan is to pursue the setting up of the funds vigorously, also at forums like the India-Saudi Arabia joint commission,scheduled tomeet shortly. Efforts will also be made to ensure that agreements are signed at the India-Gulf Cooperation Council conference scheduled for April.

The move is seen as part of Prime Minister Manmohan Singh's recent emphasis on the "strategic importance" of encouraging investment from the region.

The strategy has started to pay dividends. Public sector oil companies have been pursuing tie-ups with their counterparts in West Asia.

While discussions on divesting some stake in HPCL's Vizag refinery are progressing well, sources said confidentiality agreements have been signed for Kuwait's participation in Indian Oil's Paradeep and Panipat refineries.

Power sector companies "" NTPC, NHPC, Powergrid "" are also pursuing investments from West Asian countries. Power Finance Corporation has set up an India Power Equity Fund and is approaching investing agencies in Gulf countries.

The Ministry of External Affairs is also pursuing possibilities for investment in Indian fertiliser projects.