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Indian infrastructure financing company, IDFC Ltd, on Thursday announced it had signed a memorandum of understanding with Russian Direct Investment Fund (RDIF) to jointly invest up to $1 billion in infrastructure projects.
The pact will promote joint investments, helping accelerate economic cooperation between the two nations. “The agreement will create a framework for joint investment in infrastructure and related industries. Each party will provide up to $500 million to invest in joint projects,” said a joint statement.
RDIF, a state-owned fund set up in 2011, said the partnership will strengthen the relationship between Russia and India by promoting investments and economic cooperation adding to the growth of the two nations.
“RDIF will benefit from IDFC’s industry insights, execution expertise in cooperating with network of portfolio companies in infrastructure sector. Our partner’s experience in areas such as large scale concession projects, specifically in transport infrastructure, will be invaluable on growing Russian infrastructure market,” RDIF Chief Executive Kirill Dmitriev said. He had told a news agency on Wednesday RDIF and IDFC will invest $1 billion in hydroelectric projects in India.
The Russian firm also signed an agreement with Tata Power for exploring investment opportunities in the Russian energy sector.
IDFC hoped the agreement will enable fast-tracking vital projects and achieve long-term goals of infrastructure creation. "Both the countries are progressing at a fast pace and infrastructure remains one of the key focus areas. We look forward to leveraging our knowledge and skills in building the infrastructure of Russia and India," IDFC Executive Chairman Rajiv Lall said.
RDIF was established with $10 billion in state funds to make equity co-investments primarily in Russia with international financial and strategic investors. Based in Moscow, RDIF's management company is a 100 per cent subsidiary of Vnesheconombank. IDFC was set up in 1997 as a private enterprise by a consortium of public and private investors. It facilitates private investment and public-private partnerships in infrastructure projects in multiple sectors.
