Global investment firm KKR is reportedly planning to launch its largest Asia-focused infrastructure fund, with a target size exceeding $9 billion. A significant portion of this fund is expected to be allocated to infrastructure projects in India. This move underscores the growing confidence in India's infrastructure sector and its potential for long-term growth.
KKR's increased focus on Asian infrastructure, particularly in India, reflects the region's expanding economies and the corresponding need for upgraded and expanded infrastructure networks. These networks encompass transportation (roads, railways, ports, and airports), energy (renewable and traditional sources), telecommunications, and social infrastructure (water and waste management).
India has emerged as a particularly attractive destination for infrastructure investment due to several factors. The Indian government has launched various initiatives to promote infrastructure development, including the National Infrastructure Pipeline (NIP) and the National Monetization Pipeline (NMP). These initiatives aim to attract private sector investment in infrastructure projects by providing a clear framework and streamlining regulatory processes.
In February 2024, KKR indicated that India is likely the deepest market for infrastructure in Asia. This is supported by the amount of infrastructure being built, a substantial amount of which is happening in the private sector. KKR also noted the government's national monetization pipeline which facilitates the transfer of public sector assets into private hands on a long-term basis.
KKR's existing investments in India's infrastructure sector include roads, renewable energy, and other infrastructure assets. The firm has invested an additional $250 million in Serentica Renewables - a decarbonisation platform which it acquired for $400mn earlier. In January 2024, a KKR-backed InvIT acquired 12 road projects for ₹9000 crore. The company also acquired the majority stake in LEAP India – a pallet pooling platform.
The deployment of a substantial portion of KKR's new Asia infrastructure fund in India is expected to have a significant positive impact on the country's infrastructure development. It can facilitate the construction of new infrastructure projects, improve the efficiency of existing infrastructure assets, and create new jobs. In addition, it can help to attract other foreign investors to India's infrastructure sector, further boosting economic growth.
KKR's move aligns with a broader trend of increasing investor interest in India's infrastructure sector. Several other global private equity firms and institutional investors have also been increasing their investments in Indian infrastructure projects. This reflects the growing recognition of India's potential as a major economic power and the importance of infrastructure development in supporting its growth.
