3i India Infrastructure Fund has invested $161 million for a minority stake in Krishnapatnam Port Company, a natural port in the state of Andhra Pradesh in eastern India. KPCL is promoted by the Hyderabad-based Navayuga Group.
KPCL has been awarded a 30-year concession (extendable to 50 years) to develop, operate and maintain the Krishnapatnam port. The port is a natural, deep water, all weather port with 12 km of quays in the state of Andhra Pradesh, on a landlord port model. Inaugurated last July, the port is expected to handle about 100 million metric tonnes of bulk cargo when fully completed.
The port sector in India is expected to grow strongly in the coming years, driven by the country’s rapidly growing international trade and current port capacity constraints.
According to the India’s Planning Commission, traffic at Indian ports is projected to grow to 1225 tonnes by 2014 (from 700 tonnes in 2007). It estimates that the port sector requires around $20 billion in investment over the next five years.
“Krishnapatnam Port Company provides us with an opportunity to invest in a high quality port asset being developed on the east coast of India,” says Anil Ahuja, head of Asia at 3i. “The port is strategically located and is being developed by a highly experienced management team. The investment gives us an opportunity to partner again with the Navayuga Group, which has successfully commissioned the port within a record time of 18 months.”
“This third investment by the fund demonstrates the excellent opportunities available to investors in the rapidly expanding Indian infrastructure sector,” says Cressida Hogg, managing partner of 3i’s infrastructure business.
This $1.2 billion 3i India Infrastructure Fund previously invested in Adani Power and Soma Enterprise.
Last week, 3i sold a seven per cent stake in 3i Infrastructure in a bid to raise cash.
D.C.