Maharashtra in $2 bn deal with Gulf bank

...to set up energy city near Mumbai

A $2 billion dedicated energy city is slated to come up near Mumbai, with the Maharashtra government signing a memorandum of understanding today with Gulf Finance House, a Bahrain-based investment bank.

Gulf Finance House is also the developer of Energy City Qatar, on which the Mumbai township will be modelled.

The energy city concept involves master planning and construction of an integrated business centre that offers complete infrastructure for leading oil and gas producers, downstream refiners, producers, support services and shipping and energy trading services.

A part of the infrastructure will be an integrated platform for trading energy contracts and derivatives. Gulf Finance House is also launching the proposed energy futures exchange in Qatar.

"The initial investment will be in the range of $300-400 million, which we will raise from strategic investors and our high net worth clients. For the rest we will be looking at debt financing," Peter Panayiotou, the bank's chief investment officer, told Business Standard. Some of the debt would also be offered to Indian banks, he said.

The bank will set up a special purpose investment vehicle for the proposed development which, in turn, will float a wholly owned development company for the township.

The bank has identified three different locations around Navi Mumbai and is offering to buy land at prevailing market prices. "We are not asking the government for land," Panayiotou said. It is looking at acquiring close to 300 acres for the project.

Panayiotou added that the project would offer all the facilities the Qatar energy city offered, including an exclusive data mining platform for energy companies based there. "We would like to offer all these services, but it ultimately depends on what clients here want," he said.

He added that the company would be open to allowing Indian developers to develop portions of the city. "We would like to have some Indian developers, too, to come in and develop parts of the city, provided they meet the standards we set," said Panayiotou.