Morgan Stanley Infrastructure (MSI), the dedicated infrastructure investing platform of Morgan Stanley (MS), announced Thursday that Morgan Stanley Infrastructure Partners (MSIP), a US$4 billion global infrastructure fund, has committed to invest up to US200 million in a joint venture with Isolux Corsán Concesiones in India.
Grupo Isolux Corsán has also committed to match the investment in the joint venture, bringing the total commitment to US$400 million, one of the largest foreign investments in Indian transport infrastructure to date. Isolux Corsán Concesiones is a large-scale infrastructure concessions subsidiary of Grupo Isolux Corsán, a global company with revenues of US$4 billion, specializing in large projects across construction, engineering and concessions.
The joint venture is constructing three highway projects in India under long-term concession agreements awarded through the Build-Operate-Transfer (BOT) program of the National Highways Authority of India (NHAI). The three projects, which total over 400 kilometers of road, are estimated to cost over US$1.6 billion and have already received debt financing from leading financial institutions and substantial equity investment from Isolux Corsán.
The projects are expansions of existing roads, and will link major cities, industrial hubs, as well as ports and tourist attractions. In addition to these three projects, Isolux Corsán has qualified to bid on several new NHAI projects.
Sadek Wahba, Global Head of MSI and Chief Investment Officer of MSIP said the joint venture offers an excellent opportunity for Morgan Stanley Infrastructure to pursue its overall strategy of creating a stable portfolio of assets diversified by sector and geography. This platform will leverage Isolux Corsán’s strong credentials in developing infrastructure assets for emerging markets and its proven ability to work with local construction companies, said Wahba.
Antonio Portela, CEO of Grupo Isolux Corsán, said the investment represents the recognition of the company’s strategy in India and the confidence in its expertise in the development of large infrastructure projects in emerging markets. Isolux believes that Isolux Corsán Concesiones and Morgan Stanley Infrastructure will together capitalize on the Indian roads opportunity and create a best-in-class road portfolio company in the years to come, said Portela.
The Indian road development program being undertaken by the NHAI under a Public- Private-Partnership model is among the largest PPP programs in the world today. NHAI’s National Highway Development Program was initiated in 1999 and is estimated to total US$50 billion when completed.