The City of London Corporation, which houses the world’s busiest financial centre, where trillions of dollars of finance capital is transacted, is looking to identify projects in roads, rapid transit and renewable energy in India, said Chris Hayward, its policy chairman and co-chair of UK-India Infrastructure Financing Bridge. The Bridge will channelise project expertise and finance to projects in India which provide commercial returns to investors, Hayward told Prasanta Sahu. Edited excerpts.
India’s infrastructure funding requirement is estimated to be trillions of dollars. How could the UK-India Infrastructure Financing Bridge help channel funds to India?
The biggest priority at this stage is identifying, as we are doing at the moment, a series of projects together with NITI Aayog. It’s not just finance, project expertise is necessary. I mean structural engineering and project management skills. We have got in our steering committee representatives of some of the biggest London companies who specialize in large infrastructure programs. What we want to do is to support Prime Minister Modi’s sustainable transport infrastructure program by making that expertise available to him. Hopefully, on the back of that, in due course, financing will flow as well. The Corporation of London can’t provide finance. We can only make introductions effectively. In partnership with Niti Aayog, we will seek to develop this infrastructure programme. Now, we are discussing the nitty-gritty of getting the projects identified that NITI Aayog want us to support.
London is the top financial hub of the world with trillions of dollars managed by fund managers. But, they haven’t made large investments in India. Will that change now?
You are quite right to identify the City of London as the global financial centre. It’s true, that there is a lot of capital, but every project has to have a business case and has to have a commercial return for investors as well. So, it will be necessary in due course for those to be demonstrated.
Which are the sectors you think fund managers would be interested in putting in money?
The projects we’re identifying at the moment are in the roads, rapid transit and renewable energy. Those are the three at the moment.
It’s difficult to estimate at this moment, but how much investment do you expect to flow in in the initial phase of this partnership?
I can’t be specific about numbers at this stage. What we’re doing is step one: introducing project management skills to support the government. If there are opportunities, and they are commercial and they show commercial return, I’m sure investors will be interested.
Are there any issues that you want India to address on the policy front to attract investment?
I think the challenge for India is the sheer size of its program. It is huge. The areas we’ve just been talking about are massive, and the country is massive as well. So, I think what we would say to the Indian government is that if we are bringing in, whether it’s project management expertise or even finance, they need to make it as easy as possible for UK businesses to do business in India. So, to minimize restrictions, to maximize cooperation, that’s what we need in a partnership. That’s the assurances NITI Aayog is giving me that they want to work in partnership. So they see, the facilitation of this bridge as being of importance to the Indian government.
Is the City of London looking at extending energy transition financing to countries like India?
Transition planning in green finance is absolutely fundamental. There is not enough public money in the world to tackle Net Zero. Private finance will play a fundamental role in achieving this. We believe in the United Kingdom and the City of London in particular, that we’re not only thought leaders in this area, but also that we have some of the finest green finance products available. I’ve just come back from COP last week in Azerbaijan, where it’s quite clear that we all need to pick up the pace. If we’re going to achieve the Net Zero and we’re going to get down to 1.5 by 2050 we need to really move the pace. Part of moving that pace is private finance, and it is transition finance. I’m getting, the funds from the global North to the global South.
What is the scope of the partnership with India?
India and the United Kingdom have a huge historical friendship and relationship as well. So, it makes us a natural partner for India and the Indian government. So, I think it’s just good for us to be, in any deal like this. India wants to win, and the UK wants to win. benefits for both parties, and I think we can do that with the bridge.