KKR buys highways assets from Global Infrastructure Partners

KKR, the global investment firm, will acquire Global Infrastructure Partners’ (GIP) entire interest in Highway Concessions One (HC1) and seven highway assets with a total length of 487 kilometers. HC1 is a platform in India that manages GIP’s road portfolio which spans across seven states including Gujarat, Karnataka, Madhya Pradesh, Meghalaya, Rajasthan, Tamil Nadu, and Telangana, according to a company statement.
Through the acquisition of GIP’s interest in HC1, KKR aims to help strengthen and expand India’s national highway network, which serves about 40% of total traffic but accounts for only 2% of the country’s road network, said the statement.

Earlier, the largest Canadian pension funds - Canada Pension Plan Investment Board (CPPIB) and Caisse de depot et placement du Quebec (CDPQ) were in advanced discussions for acquiring road assets of GIP, in a deal worth Rs2500-3000 crore, which did not fructify.

In 2018, GIP had purchased IDFC Alternatives’ infrastructure investment business including the road assets. As part of its realignment exercise, GIP had decided to monetise its stake in Highway Concessions One. These projects include five toll roads and two annuity roads across seven states— Ulundurpet Expressways in Tamil Nadu, Nirmal BOT in Telangana, Dewas Bhopal Corridor in Madhya Pradesh, Bangalore Elevated Tollway in Karnataka, Godhra Expressways in Gujarat, Jodhpur Pali Expressway in Rajasthan and Shillong Expressway in Meghalaya.

“Roads are one of the largest and most crucial infrastructure assets in India, where the world’s second-largest road network is located. Rapidly increasing passenger and commercial vehicle traffic has driven the strong demand to expand the country’s road network even further and the reciprocal need for investment in the sector. This is why the transportation sector is a key area of our infrastructure strategy in India," said Hardik Shah, Managing Director and Head of India Infrastructure at KKR.

KKR made its investment from the KKR Asia Pacific Infrastructure Fund. The investment represents KKR’s third investment in India from the Fund and the Firm’s first investment in Asia’s transport sector. Recent infrastructure investments in India include India Grid Trust (IndiGrid), a leading infrastructure investment trust in India, and Virescent Infrastructure, a renewable energy company in India.