The Canada Pension Plan Investment Board (CPP Investments), one of the world’s largest pension funds, has made a further Rs 1,820 crore (about $219 million) commitment to India’s National Highways Infra Trust (NHIT).
NHIT is an infrastructure investment trust sponsored by the National Highways Authority of India (NHAI).
In a statement, CPP Investments said it will continue to hold 25% of the units in NHIT, with its total investment increasing to about $452 million. The Ontario Teachers’ Pension Plan Board also holds 25% of the trust.
InvITs are collective investment vehicles similar to mutual funds, which enable direct monetary investment from individual and institutional investors in infrastructure projects that earn them a small portion of the income as returns.
“Our follow-on investment in NHIT deepens our commitment to this highly scalable platform, which has an important role to play in the continued expansion of the Indian road network,” said James Bryce, managing director, head of Infrastructure, CPP Investments.
The Canadian pension manager’s investment was part of NHIT’s capital raise by way of an institutional placement. Proceeds from the fresh investments will be used to acquire seven brownfield toll roads that are currently owned by NHAI.
The NHAI is a statutory authority set up in 1988 by an act of the Indian Parliament and is responsible for developing, maintaining, and managing national highways in India.
Per the announcement, the acquisition will increase NHAI InvIT’s portfolio from eight to 15 toll roads, which span approximately 1,500 kilometres across nine Indian states—Assam, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh, Telangana, and West Bengal.
NHAI’s InvIT was launched in 2021 as part of the government’s plan to tap alternative sources of financing to boost public spending in the roads and infrastructure sector. It initially had a portfolio of five operating toll roads with an aggregate length of 390 kilometres.
Bryce said India remains a key market for CPP Investments and infrastructure is vital to the country’s economic growth.
CPP Investments committed over $3.77 billion to direct and indirect investments in Asia in the fiscal ended March 31, 2023, according to a disclosure.
The pension fund spent over $2.5 billion on primary and secondary investments in regional companies. During the year, it also earmarked over $1.2 billion for capital commitments to Asia-focused funds.
