 "UK-India sign new infrastructure financing bridge agreement in London")
A first-of-its-kind India-UK financing agreement to facilitate and unlock sustainable international investments into New Delhi's ambitious infrastructure projects was signed off in London on Wednesday, with a raft of national highways, rapid transport and renewable energy schemes set to benefit.
The UK-India Infrastructure Financing Bridge (UKIIFB), agreed during the UK Economic and Financial Dialogue (EFD) in September last year, has now been operationalised for an initial two-year period between the City of London Corporation and the National Institution for Transforming India (NITI Aayog). A Steering Committee made up of representatives from the government's Treasury department, construction giants, engineering and legal firms operating across both countries has also been unveiled to drive forward the aims of getting mega infrastructure projects bid-ready.
This is a game-changer that not only accelerates India's economic ascent but also strengthens its position on the global stage. It is not limited to connecting the two nations; it connects India to its aspirations of becoming a global powerhouse," said B.V.R. Subrahmanyam, CEO of NITI Aayog, during the signing ceremony.
He highlighted India's position as a major investment destination for the world, with 15-20 per cent of the world's incremental growth in absolute terms coming from the country, and London will now enjoy a first-mover advantage in that space with this new initiative.
The potential is huge. The idea is to pick up one or two marquee projects, structure them around building and design standards which are global in nature and address perceived risks so that the cost of capital is reduced, making the projects attractive to investors to invest in. The bridge itself is not about getting into the bidding process. It's about bringing it to a stage where projects are then amenable to international finance, explained Subrahmanyam.
The Delhi-Meerut Regional Rapid Transit System, projects in the highways sector and green hydrogen and renewable space are among those narrowed down for the first tranche during preparatory work underway over the past year.
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We have identified eight initial projects. Now we have formally committed to each other today, we can start to drive forward, hopefully at pace, because there's a lot to be done and there's a big agenda, said Chris Hayward, Policy Chairman of the City of London Corporation.
The UK's expertise in professional services, finance and scaling major projects makes it a natural partner to meet India's growing infrastructure needs, showcasing the City of London's position as a global city. Additionally, our leadership and talent in green finance can facilitate the development of India's ambitious sustainable projects providing climate solutions in the push to net zero, he said.
The UKIIFB Steering Committee will start looking to accelerate the mobilisation of international private sector investment into Indian sustainable infrastructure; provide policymakers with recommendations on how to address barriers to international private sector investment in Indian sustainable infrastructure; and developing knowledge and best practices on sustainable infrastructure projects and how these can be better positioned as investable and attractive to international investors effectively getting these projects towards the last mile.
The UKIIFB is a striking testament to the complementarity of our bilateral economic relationship. It is a means for India and the UK to use the respective strengths of their systems the UK's sophisticated and well-resourced financial sector, and India's world-leading capacity to generate sustainable and high value returns in the long-term to offer each other the benefit of growth-based partnerships for the long-term, said Indian High Commissioner to the UK Vikram Doraiswami.
As India's NITI Aayog and the City of London implement the UKIIFB, and thereby jointly design large infrastructure project proposals in a manner that benefits private capital inflows, India and the UK will broaden and deepen their relationship by contributing to each other's lasting and sustainable growth, he added.
The UKIIFB Steering Committee includes representatives from Aon, Arup, Mott MacDonald, Clifford Chance, Sequoia Investment Management Company, Department of Economic Affairs, Larsen & Toubro, Sorin Investment Fund, Economic Laws Practice and AECOM India Private Limited.
While Mott MacDonald's Simon Harris welcomed the excellent opportunity for investors to collaborate with India's project shapers to accelerate investable and sustainable infrastructure development, Arup's Sowmya Parthasarathy hailed it as a pivotal moment in the bilateral partnership.
Mark Courtneidge of Aon UK and Anurag Gupta of Sequoia Investment Management Company highlighted the risk management expertise that will be enhanced as a result of the initiative.