core sector communique

ADIA delegation meets Kamal Nath, explores investment opportunities in the Urban Sector

Abu Dhabi Investment Authority (ADIA) has expressed a keen interest in investing in Urban infrastructure sector in India. A delegation led by Sheikh Hamed bin Zayed Al Nahyan, Managing Director of ADIA met the Urban Development Minister Mr. Kamal Nath to discuss investment opportunities in the urban sector.

Mr. Kamal Nath informed the delegation about the over whelming contribution of the urban sector in India’s growth story – accounting for around 60% of GDP which is likely to further increase to around 70% in the next decade. Over 70% of the new jobs shall be created in the urban centres.

He stated that the challenges of urbanization in India are unprecedented in scale and significance and that it is estimated that during the next decade, the urban population would account for around 40% of India’s population i.e around 500 million people. Stressing on the rapid urbanisation in India, Mr Kamal Nath stated that India already has 53 cities with over a million population each and by 2030, India will have 68 cities with population of more than a million. According to some estimates India requires an investment of USD 1.2 trillion in the Urban Sector in next 20 years.

Minister Nath also informed that the Government was fully committed to bridging the urban infrastructure deficit and is considering allocating 0.25 of GDP to the sector over the 12th Five Year Plan under JnNURM. Besides, the Government also proposes to enhance the role of PPP in the sector in order to harness private sector efficiencies and resources – both human and capital.

Minister Nath invited ADIA to participate in the creation of Urban Infrastructure in India that would create a win-win situation for both the countries. Both sides agreed that bilateral ties in the urban sector do not reflect the full potential and must be further exploited to the mutual advantage of both the countries. Given the global investment scenario, both sides agreed that UAE and India should work towards a much greater engagement in urban infrastructure sector. ADIA has already decided to invest towards the creation of seven new cities in six states.

Mr Nath pointed out the huge investment opportunity in the development of Metro projects that were being taken up across the country through various financing models including the PPP model. Sheikh Nahyan stated that, “ADIA believed in the India story and was a long term investor in India”. ADIA expressed interest in exploring the possibilities of investing in the Metro sector.

Abu Dhabi Investment Authority (ADIA) was established in 1976 is world’s largest sovereign wealth fund with investible funds worth $700 billion. It is a globally diversified investment institution, which is wholly owned by the Government of Abu Dhabi.