Investment Strategy

The Company’s investment policy is as follows:

Overall focus

The Company will invest at the asset level or via specific holding companies (not via other funds or in the equity of non-specific parent companies) in infrastructure projects in India. Such investments are to be focused on the broader sectors of:

• Energy – including assets involved in electricity generation, transmission and distribution; infrastructure assets related to oil and gas, service provision and transmission; renewable fuel production and renewable energy assets
   
• Transport – including investment in roads, rail, ports and airport assets, and associated transport interchanges and distribution hubs.

Additionally, the Company may make investments in other economic and social infrastructure sectors within India where opportunities arise with similar risk and return characteristics to those found within the energy and transport sectors.

Infrastructure India intends to secure as many projects as possible that are expected to commence planned commercial operations within 18 months of the Company's investment.

Sector weighting

The Company is focused on investing in assets close to the commencement of operations - it will concentrate on making investments in those assets which are in the process of construction and typically within 18 months of planned commercial operation. In some cases, however, the Company may invest in primary bidding and/or early stage assets (e.g. before the commencement of construction) and, in some cases, existing assets in operation.

Asset allocation

The Company will focus on being a purely equity investor at the SPV level in infrastructure assets in India.

The Company may also invest via subordinated debt or mezzanine instruments in some cases.

Risk diversification

The Company will seek geographical diversification within India and diversification within the project types, counterparty, payment mechanisms and co-investment partners.

Gearing

Gearing at the non-recourse SPV level will typically be at a debt/equity ratio of 70/30. The Company will seek to increase gearing at the project level when appropriate but will seek to ensure, as far as possible, that gearing at the non-recourse SPV level does not exceed 90% of total capital.

Gearing at the Company level will be limited to no more than 50% of its NAV.

Maximum exposures

The Company expects that single investments will typically represent no more than 30% of the Group's NAV (as measured at the time of investment). Should the maximum exposure be reached, the Group will seek to ensure that the remainder of the Group’s investments are spread across different asset classes in different geographies (within the definition of the Group’s overall focus) to ensure risk diversification. Subject to this, there will be no minimum or maximum stakes that the Company can have in projects although its target size of equity investment in any one single entity project is likely to be between £10 million and £30 million.