Russia’s RDIF to partner IDFC in $1 bn hydro power investments in India

11 Dec 2014


The Russian Direct Investment Fund (RDIF) will team up with India's Infrastructure Development Finance Corporation (IDFC) to pool $1 billion investible funds for hydroelectric projects in India, the head of the Russian state fund said yesterday.

RDIF has committed $500 million, while IDFC, a leading infrastructure investor, will bring in the remaining $500 million under a deal proposed to be signed today, during Russian President Vladimir Putin's visit to India.

RDIF, however, seems to be interested only in projects involving a large Russian hydro-power company, which its head Kirill Dmitriev did not name, according to a Reuters report.

Unconfirmed reports point to state-controlled RusHydro as the possible Russian company.

The two countries are focusing on energy security as they revive an old strategic agreement signed earlier during the time of the liberation of Bangladesh.

Energy security is a top priority for the government of Prime Minister Narendra Modi who has promised to overcome India's chronic power shortages by the year 2020. For this the country has to tap all available resources, including hydro, solar, wind and nuclear, as it cannot depend on the country's large coal deposits for ever.

The country has to both find power to run new factories that are coming up and meet household requirements but has to increasingly limit its dependence on thermal power in order to comply with pollution control regulations.

IDFC is 16 per cent state owned while the Russian fund was set up in 2011 with $10 billion in state funds.

RDIF invests in projects where the promoters invest a minimum of 50 per cent of the project cost, Dmitriev said, adding that he expected to commit funds to Indian projects next year.

RDIF has so far invested $1.3 billion in Russian projects along with $6 billion by outside investors, mainly sovereign wealth funds from the Middle East and Asia.

Dmitriev said the RDIF had gained on investments in a Russian telecom company and the Moscow stock exchange, despite a slowing economy and sliding oil prices.

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