Bahrain-based Gulf Finance House (GFH) yesterday officially announced the launch of its $395 million private placement, to raise the equity required to fund the infrastructure of Energy City India. The investment is expected to yield a total return of at least 75 per cent over three years and the equity issue is being underwritten by Kuwait Investment Company.
Following the success of the Energy City Qatar project, Energy City India is the second energy city in a series of energy- focused business clusters planned across the Middle East and Asia.
Energy City India will occupy a prime-site of 600 acres in Navi Mumbai, in the state of Maharashtra.
The project will be located within a few kilometres from Navi Mumbai's upcoming new international airport, which upon completion will be both the largest and busiest in Asia.
The project site is also located along the Mumbai-Pune expressway, which is being developed by the government as a key business corridor.
The Energy City cluster concept provides a complete business infrastructure to both local and foreign oil and gas producers, as well as downstream refiners and producers and businesses involved in shipping, energy trading and support services.
The first of these business clusters, Energy City Qatar, was announced in March last year and is being developed in the Lusail area of Doha.
GFH raised more than $500m from regional investors to fund the development of the Qatar project's infrastructure.
With most plots within the Qatar project already sold, the project has achieved its initial targets and is now progressing towards the construction of site infrastructure ahead of construction of the buildings.
Announcing the launch of the private placement, GFH chief executive officer and board member Esam Janahi said: “The $395 million Energy City India private placement offers regional investors with an opportunity to participate in the tremendous prospects being offered by the Indian economy, which is growing at a rate of over 9.2 per cent per annum.”
The private placement initiative, which is currently underway, is only open to institutional investors, and has a minimum subscription level of $250,000, with subsequent investments in multiples of $50,000.
“India has tremendous energy needs which are growing by the day,” said Mr Janahi.
“With a strong local offshore oil producing industry and a vibrant energy sector centred around Mumbai and Navi Mumbai, we are already witnessing a steady expansion of energy related infrastructure and capacity.”
“Given this background, we are of the view that this is a project whose time has come, particularly in the context of India's rapid and obvious development.”
In October last year, GFH signed a wide ranging Memorandum of Understanding (MoU) with the government of Maharashtra, which articulated the government's commitment to the project.
“Energy City brings to Mumbai and to India a new concept – that of being able to work and live in one holistic environment,” said GFH deputy chief executive and chief investment officer Peter Panayiotou.
“No longer will employees have to spend their valuable personal time commuting to work.
“The project will include a substantial amount of land dedicated to providing accommodation, leisure, medical and shopping facilities to people working at Energy City.”
Navi Mumbai is the new growth corridor of the state and is being developed using a master plan designed to decongest the city of Mumbai.
Source : Gulf Daily