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In partnership with
UK-India Infrastructure Financing Bridge
Year 1 Report - September 2025 UK-India Infrastructure Financing Bridge - Year 1 Report
Contents
Foreword 4
Executive Summary 6
Key Recommendations 8
Further Considerations for Enhancing India’s Investment Landscape 38
Looking Ahead 40
Appendix - Report Context 42
Image: Mumbai City skyline
32 India is one of the world’s most exciting investment
destinations — a rapidly growing economy with ambitious
infrastructure goals and a clear commitment to sustainability.
But realising the full potential of international capital flows into
India’s infrastructure sector requires partnership, trust, and
reform.
The UK India Infrastructure Financing Bridge (UKIIFB) is a
first-of-its-kind initiative designed to meet this challenge —
by matching India’s infrastructure needs with global capital
and UK expertise in sustainable project finance. This report
captures the progress made in the Bridge’s first year and sets
the stage for deeper collaboration.
Led jointly by the City of London Corporation and NITI Aayog,
and supported by an expert working group drawn from both
countries, the UKIIFB is helping to unlock investment into
strategic sectors such as roads and rapid transit. At its core
is a shared recognition: international investors need clarity,
confidence and consistency — and India’s economic growth
ambitions deserve a financing model that matches their scale.
India has been steadfast in its commitment to creating a
sustainable and resilient infrastructure ecosystem that
supports inclusive economic growth. As we continue to pursue
our national development priorities, catalysing international
capital into sustainable infrastructure remains an essential part
of this journey.
The UK-India Infrastructure Financing Bridge (UKIIFB) was
launched on 12th September 2023 under the Joint Statement
of the 12th Economic and Financial Dialogue (EFD) between
India and the UK, followed by the subsequent exchange
of letters between NITI Aayog and the City of London
Corporation in September 2024 in London. It is a timely
initiative that reflects our continued efforts to foster cross-
border collaboration and bring global expertise to accelerate
investment into India’s infrastructure sector. I am glad to note
that in its first year, the UKIIFB has made important progress—
developing practical tools such as the Project Assessment
Framework, facilitating rich policy dialogue, and aligning project
preparation processes with global investor expectations.
Foreword
This report provides a compelling case for change. It identifies practical steps to make Indian infrastructure projects more investible, including a new Project Assessment Framework developed to align with global standards. It highlights the importance of risk transparency, sustainability, and a shift in mindset — from project-centric to deal-centric thinking. And it outlines how deeper partnerships between Indian sponsors and UK financial institutions can accelerate the flow of capital.
The UKIIFB is emblematic of the type of high-impact, practical
cooperation that will define the UK-India relationship in
the years ahead. This work supports India’s $4.5 trillion
infrastructure ambition while reinforcing the UK’s role as a
trusted global financial partner.
We thank all contributors to this first-year programme and look
forward to building on this foundation. The opportunity ahead
is immense. Together, we can drive capital where it is needed
most — to power sustainable, inclusive, and long-term growth.
Chris Hayward Policy Chairman, City of London Corporation
Shri B.V.R. Subrahmanyam CEO, NITI Aayog
I may add that this work comes at a critical juncture for India, as we expand our infrastructure footprint in line with the ambitions of the National Infrastructure Pipeline and Gati Shakti. The collaboration with UK stakeholders has provided valuable insights into how we can further enhance project bankability, integrate sustainability, and de-risk capital flows to attract high-quality investment.
I congratulate the teams at NITI Aayog, the City of London
Corporation, and our technical and sectoral partners for
their work in advancing this initiative. I appreciate the
continued support of stakeholders from both countries who
have contributed to this effort and helped strengthen the
foundation for future progress.
I request policymakers, investors, and practitioners to carefully
consider the findings of this report and work together to
unlock India’s infrastructure potential. I am confident that
through shared commitment and sustained action, we can
shape a future that is prosperous, green, and inclusive for all.
5 UK-India Infrastructure Financing Bridge - Year 1 Report
4 This report marks the first year of the UK-India Infrastructure Financing
Bridge (UKIIFB) and comprises a set of insights and recommendations
that have been surfaced from Working Group deliberations, as well as a
series of interviews with investors and other stakeholders.
Executive Summary
India is fast emerging as the world’s fourth largest economy
and is pegged to be the fastest growing major global
economy. Sustainable infrastructure is critical for India’s
economic trajectory - while fulfilling its net-zero climate
commitments. The UKIIFB has been established to build
collaboration between the UK and India in the development
of an international project finance sector to meet the
demand for infrastructure growth on sustainable terms.
India’s infrastructure demand is underpinned by rapid
urbanisation, and a large rising middle class, resulting in
substantial infrastructure deficits and opportunities. India’s
focus on global priorities, including energy transition and
sustainability, has further increased its appeal to investors.
Proactive government measures to address concerns
around governance, such as the Insolvency and Bankruptcy
Code and ongoing regulatory enhancements, have further
strengthened the investment climate; enabling greater
private sector participation and creating a more predictable
framework for international investors.
Additionally, the government has taken significant steps to
improve the bankability of infrastructure projects through
interventions and incentives such as the Hybrid Annuity
Model (HAM), land acquisition guarantees, and the removal
of connection tariffs in renewable energy.
India’s dynamic growth trajectory calls for an estimated $4.5
trillion investment in infrastructure by 2030, encompassing
cost escalations, green initiatives, and transformative
projects like 100 smart cities and enhanced connectivity.
Major projects are increasingly drawing international private
sector interest, particularly in centrally owned, operational
brownfield and yellowfield initiatives. While international
investment in renewables remains focused on photovoltaic
solar and wind energy, greenfield projects face challenges in
attracting global capital due to limited revenue track records
and uncertainties in planning and construction. To fully
tap into greenfield potential, India is focused on enhancing
project preparation, strengthening delivery frameworks,
and improving risk mitigation strategies. There is also a
growing emphasis on evaluating all capital (domestic and
international) through a value-for-money perspective rather
than just cost. The UK-India Infrastructure Financing Bridge
(UKIIFB) has prioritised these discussions, with its Year One
recommendations reflecting this strategic focus.
There was also some acknowledgement from stakeholders
that perception played a role in their dimmed enthusiasm
for Indian projects. Much of these perceptions lingered
from past several decades, rather than recent experiences
by the stakeholders. As an example, losses incurred by
early investors in the early 2010s have made investors
cautious about the underlying opportunity of investing in
Indian infrastructure in the present. There is both a lack
of understanding of how the market has changed and, in
some instances, some reticence to making the investments
needed to build this understanding – although this isn’t
universal and most investors showed interest in the Indian
market.
The UK brings deep and distinctive strengths to the
challenge of infrastructure investment. As a global hub
for project finance, legal services, institutional investment,
and green finance, the UK has decades of experience
structuring complex, large-scale infrastructure deals that
deliver long-term value. Its regulatory frameworks, risk
allocation models, and public-private partnership expertise
are internationally recognised and widely emulated. The UK
is also home to many of the world’s leading infrastructure
investors, advisers, and developers — institutions that
not only bring capital but also a track record of delivering
resilient, sustainable infrastructure across markets. This
unique ecosystem enables the UK to offer strategic insights,
practical tools, and investor-aligned frameworks that can
support countries like India in unlocking international capital
at scale.
This report examines how India can capitalise on the
promise of scale and returns, and the critical steps that need
to be taken in order to engage the international finance
community effectively. As well as how UK can play a role in
supporting that transition.
It is clear that the opportunity in India is real and the
potential for scale is unique amongst its peers. Yet the shift
in investor appetite is not expected to happen overnight.
The opportunity in sustainable infrastructure is tempered
by real and perceived issues. And the best way forward is
that both the UK and Indian Governments comprehensively
articulate those issues objectively and communicate a clear
strategy for how they will help the market address them.
The Key Recommendations section bring together an initial
set of interventions that have arisen during discussions and
engagement in Year 1 of the UKIIFB.
$4.5tn
India’s dynamic growth trajectory calls for an estimated $4.5 trillion investment in infrastructure by 2030 UK-India Infrastructure Financing Bridge - Year 1 Report
67 The global interest in India’s infrastructure market is undeniable,
but converting this enthusiasm into concrete investments requires
a strategic overhaul. By adopting a ‘deal-centric’, value-focused,
and risk-aware approach, India can overcome perception barriers
and compete effectively in the global investment landscape.
These recommendations provide a roadmap to align infrastructure
opportunities with investor priorities, ensuring India emerges as a
top destination for international capital.
Key Recommendations
To attract substantial international investment in India’s
infrastructure, a profound shift in mindset is imperative
before implementing new practices. This transformation
goes beyond procedural changes, requiring a strategic
reorientation that prioritizes investor appeal and global
competitiveness. The key is to adopt an investor-centric
approach that aligns with the priorities of risk, value,
and returns, while addressing outdated perceptions and
bridging the gap between global interest and tangible
investment actions.
Core Elements of the Mindset Shift
From Project-Centric to Deal-Centric Focus i
Historically, infrastructure development in India has centred on individual projects, often presented as standalone initiatives with limited appeal to global investors. A deal-centric approach reframes these projects as integrated investment opportunities, bundling financing, execution, and long-term benefits into compelling packages. By crafting deals that address investor needs - such as clear timelines, stakeholder alignment, and profitability - this approach makes projects more attractive, fostering trust and encouraging capital commitment. Instead of pitching a single highway project, a deal could encompass a network of highways with integrated tolling systems, maintenance contracts, and public-private partnership structures, offering a cohesive investment opportunity.
Prioritizing Long Term Value Over Cost-of
Capital
ii
• Focusing solely on cost-of-capital (e.g., interest rates or
financing costs) often undervalues the broader economic
and social benefits of infrastructure projects, such as
job creation, regional development, and sustainability.
Highlighting long-term value aligns with global investors’
goals of sustainable returns and societal impact.
• Projects that demonstrate enduring value, such as
renewable energy grids or smart cities, are more likely
to attract investors seeking stable, long-term gains over
short-term cost savings.
• A solar power project should emphasize its contribution
to India’s renewable energy goals, reduced carbon
emissions, and predictable revenue streams, rather than
just the upfront financing costs.
Image: Mumbai skyline UK-India Infrastructure Financing Bridge - Year 1 Report
--
89 Embracing an Investor-Centric Approach v
• Global investors prioritize risk, value, and returns above
all else. An investor-centric strategy tailors’ proposals to
these priorities, ensuring projects are structured to meet
international standards and expectations.
• By aligning with investor needs, India can position itself
as a competitive destination, overcoming perceptions
rooted in past decades of bureaucratic or regulatory
challenges.
• Offering clear exit strategies, such as buy-back clauses or
secondary market options for infrastructure assets, can
appeal to investors seeking liquidity and flexibility.
The importance of this mindset shift cannot be overstated.
India’s favourable economic growth and young demographic
profile are compelling, but they alone are insufficient to
secure investment in a highly competitive global market.
Countries like Singapore, Vietnam, and the UAE also strive
for international capital, offering streamlined processes and
investor-friendly environments. A sales strategy that fails to
incorporate these investor-centric principles, or relies solely
on India’s macroeconomic narrative, will struggle to convert
interest into action.
Moreover, stakeholder feedback highlights that lingering
negative perceptions, often based on outdated experiences
from past decades, continue to dampen enthusiasm for
Indian infrastructure projects. These perceptions - related
to bureaucratic delays, regulatory opacity, or project
execution risks - create a significant barrier for new and
large investors. To overcome this, India must not only select
high-potential opportunities but also design and present
them in ways that address investor concerns with clarity and
foresight. The persistent gap between global interest and
actual investments underscores the urgency of adopting a
strategic, investor-focused approach.
Shifting from Rigid Specifications to Robust
Risk Management
iii
• Traditional infrastructure proposals often rely on rigid
technical specifications, which can deter investors by
limiting flexibility and ignoring uncertainties. A risk-
focused approach proactively identifies, mitigates, and
communicates risks, addressing investor concerns head-
on.
• Transparent risk management - covering regulatory,
financial, and operational risks - builds confidence and
differentiates India from other markets where risks may
be less clearly articulated.
• Example: For a port development project, detailing
mitigation strategies for environmental regulations,
labour disputes, or geopolitical risks can reassure
investors of the project’s viability.
Evaluating Total Project Costs Beyond Capital
Expenditure
iv
• Quoting only capital expenditure (capex) overlooks
ongoing costs like operations, maintenance, and lifecycle
expenses, which can significantly impact investor returns.
Presenting total project costs provides a comprehensive
financial picture, enabling better decision-making.
• This transparency ensures investors understand the
full scope of their commitment, reducing surprises and
enhancing trust in India’s infrastructure market.
• Example: A railway project proposal should include not
just construction costs but also maintenance, operational
staffing, and technology upgrades over the project’s
lifespan.
These recommendations aim to attract a diverse pool of
international investors, secure optimal pricing, and expedite
infrastructure development while bolstering investor
confidence and establishing India as a global leader in
managing investment risks within emerging markets.
For India, adopting this approach promises long-term
advantages, including sustainable economic growth,
enhanced global competitiveness, and access to the
expertise and resources of international partners. Each
recommendation is paired with a notable advancement in
Indian infrastructure, showcasing the country’s openness
and commitment to welcoming global capital.
These examples, drawn from significant central and
operational assets, serve as illustrative cases that highlight
the strategic direction and intent of India’s infrastructure
investment landscape. UK-India Infrastructure Financing Bridge - Year 1 Report
10 11 To attract international investment and build investor
confidence, India’s procurement teams should adopt
globally recognised frameworks, such as the UK’s Five Case
Model
1
, to guide project development from inception.
This investor-centric approach provides a structured
methodology that addresses strategic, economic,
commercial, financial and management dimensions,
effectively mitigating perceived risks and aligning projects
with international expectations.
Currently, India’s Detailed Project Report (DPR) process
focuses primarily on technical and financial aspects. To
enhance its effectiveness, the DPR framework should
evolve to incorporate a more comprehensive perspective,
integrating critical elements like project resilience,
sustainability, and robust risk management, which are the
key priorities for global investors. By embedding these best
practices early in the project lifecycle, rather than using
them as a presentation tool in later stages, India can ensure
that projects are designed and executed to meet world-class
standards.
To achieve this, significant investment in capacity building
is essential. Training and upskilling procurement teams and
project developers will enable them to effectively implement
these frameworks, fostering consistency and transparency.
This strategic alignment with global standards will not only
enhance the credibility of Indian projects but also position
India as a competitive destination for international capital,
driving sustainable economic growth
1 “The Five Case Model is the UK government’s best practice approach to developing spending proposals and enabling effective business decisions. It provides a
disciplined, step-by-step approach that helps to ensure that projects and programmes are supported by a robust and transparent business case.”— Source: HM
Treasury Green Book, “Guide to Developing the Project Business Case” (2022)
Promising Innovation Box Out: Noida Airport
Aligning project development with global standards
can enhance investor confidence, and India has
already made significant strides in strengthening its
infrastructure project frameworks through well-
established Public-Private Partnership models. Over
the past year, several large-scale infrastructure
projects have successfully demonstrated India’s
ability to balance risk, ensure financial viability, and
attract global investments. A prime example is the
Jewar International Airport (Noida International
Airport) project, which is being developed under
a Public-Private Partnership model with Zurich
Airport International Airport as the concessionaire.
This project has incorporated best practices in
risk-sharing, financial structuring, and long-term
sustainability, setting a benchmark for large-scale
infrastructure development.
Recommendation 1:
Enhance Project Development by Aligning with Global Standards
1.
Image: Noida Airport UK-India Infrastructure Financing Bridge - Year 1 Report
12 13 To position India as a prime destination for international
capital, infrastructure projects must proactively integrate
sustainability and long-term resilience, aligning with global
investor priorities. These priorities encompass two critical
dimensions: adherence to Environmental, Social, and
Governance (ESG) commitments and the incorporation of
robust resilience measures to ensure project viability and
mitigate risks. finance capital.
2.1 Aligning with Global ESG Standards
International investors, including banks and construction firms, prioritize ESG compliance, with firm commitments to decarbonising portfolios and meeting sustainability targets, such as those outlined in the United Nations Sustainable Development Goals (SDGs). Projects lacking objective, measurable ESG metrics are less likely to secure funding, as investors seek alignment with their environmental and social goals. The Working Group has noted a potential misalignment between domestic and international ESG compliance expectations. To bridge this gap, India must adopt globally recognised sustainability frameworks from the outset of project planning. By embedding ESG principles into the Detailed Project Report (DPR) process, projects can demonstrate credible commitments to environmental stewardship, social responsibility and governance transparency, thereby reducing perceived risks and appealing to international investors.
2.2 Embedding Long-Term Resilience
Beyond ESG compliance, resilience is a cornerstone of sustainable infrastructure. Investors increasingly prioritise projects designed to withstand long-term environmental, economic, and operational challenges to avoid stranded assets. This requires integrating adaptive design principles, such as modular construction, climate-resilient infrastructure and advanced risk assessments, into project frameworks. For instance, incorporating climate adaptation strategies, such as flood-resistant designs or heat-tolerant materials, ensures projects remain viable under changing environmental conditions. By prioritising resilience in early planning stages, India can lower risks, reduce long-term capital costs, and deliver predictable financial outcomes, making projects more attractive to global investors.
Delhi-Mumbai Expressway – Aligning with
Global Sustainability Standards
A key example is the Delhi-Mumbai Expressway -
India’s longest expressway which has been designed
with solar-powered lighting, wildlife corridors,
and rainwater harvesting systems to ensure
environmental sustainability. These wildlife corridors,
have been constructed in ecologically sensitive
regions such as the Aravalli hills and the Sariska
Tiger Reserve, allowing for uninterrupted movement
of wildlife and reducing habitat fragmentation. The
rainwater harvesting structures are strategically
embedded to collect groundwater in drought-prone
zones, contributing to long-term water security. Solar
installations along the expressway reduce operational
emissions and promote energy self-sufficiency for
highway infrastructure. Together, these features
make the expressway a model for climate-resilient
design, aligning with global sustainability standards
and boosting investor confidence in India’s green
infrastructure ambitions.
Recommendation 2:
Prioritise Sustainability and Resilience to Attract Global Investment
2.
2.3 Strategic Implementation for Global Appeal
To operationalize these priorities, India should:
• Adopt International Standards: align project sustainability
metrics with globally accepted frameworks like the
SDGs to enhance credibility and access to global climate
finance.
• Incorporate Resilience in Design: use modular designs,
climate-adaptive strategies, and comprehensive risk
assessments to future-proof infrastructure.
• Build Capacity: invest in training for project developers
and procurement teams to ensure expertise in ESG
compliance and resilience planning.
• Engage Stakeholders Early: collaborate with international
investors during project conceptualization to align with
their ESG and resilience expectations.
By embedding sustainability and resilience into the core
of infrastructure projects, India can not only meet global
investor demands, but also unlock access to climate finance
and green investment opportunities. This strategic focus
will enhance project bankability, reduce financial risks, and
position India as a leader in delivering sustainable, future-
ready infrastructure on the global stage.
Image: Delhi-Mumbai Expressway – Aligning with
Global Sustainability Standards UK-India Infrastructure Financing Bridge - Year 1 Report
14 15 To make India’s infrastructure projects more appealing to
international investors, it is critical to address the perception
of opacity and unpredictability in construction and
operational risks. By improving transparency, standardising
risk-sharing frameworks, and providing clear government-
backed incentives, India can reduce risk premiums, enhance
project bankability, and attract competitive global capital.
3.1 Addressing Perceived Risks in Emerging Markets
In established markets, infrastructure risks are well-
understood, predictable, and priced accordingly. However,
in emerging markets like India, risks such as regulatory
changes, land ownership disputes, competition from other
assets, or the integration of unproven technologies are
often perceived as opaque or unpredictable, leading to
higher risk premiums.
International investors are comfortable pricing risks for
operating assets with established track records, such as
toll roads, but are deterred by uncertainties in greenfield
projects where complexities like construction challenges,
local partner reliability, and unproven revenue streams
converge.
The Working Group has identified that India’s Detailed
Project Report (DPR) process at times lacks comprehensive
risk articulation and mitigation strategies, which hinders the
private sector’s ability to accurately price risks.
The pricing of risk in such markets is driven by two
elements: the risk itself and the complexity surrounding
it. The compound effect of these factors is a market that
becomes increasingly complicated and less attractive to
international investors. To account for the elevated risks,
higher expected returns are required, which can ultimately
price international capital, including UK investors, out of the
market. This challenge is further compounded by the lower
cost of local capital – whether debt or equity – which often
makes international capital less competitive.
3.2 Enhancing the DPR for Risk Transparency
A robust DPR is pivotal to addressing investor concerns.
It needs to clearly articulate all potential risks across
the project lifecycle - strategic, regulatory, financial, and
operational - and outline how procuring authorities will
manage them. Key improvements include:
• Comprehensive Risk Identification: detail risks such
as regulatory shifts, land acquisition challenges, or
technological uncertainties, supported by historical data
or case studies where possible.
• Risk Management Strategies: specify mitigation
measures, including timelines, responsible parties, and
contingency plans.
• Standardized Risk Frameworks: develop consistent
methodologies for risk assessment and allocation
to reduce ambiguity and align with international
expectations.
By embedding these elements into the DPR process from
project inception, India can enhance transparency, enabling
investors to price risks accurately and reducing the need for
elevated returns that often price international capital out of
the market.
Recommendation 3:
Enhance Transparency and Consistency in Risk Management to Attract International Investment
3. UK-India Infrastructure Financing Bridge - Year 1 Report
16 17 The Hybrid Annuity Model (HAM) - Vadhavan Port Project
The Vadhvan Port Project in Palghar, Maharashtra,
is a major maritime infrastructure initiative utilizing
a modified Hybrid Annuity Model (HAM) for its $2.47
billion dredging, reclamation, and shore protection
works. The Jawaharlal Nehru Port Authority (JNPA) and
the Maharashtra Maritime Board (MMB) are developing
the port through Vadhvan Port Project Limited (VPPL)
under a public-private partnership (PPP) framework.
The total project cost is estimated at $9 billion, including
land acquisition and development of core infrastructure,
terminals, and commercial facilities.
Under the HAM, the government funds 60% of the
project cost ($1.48 billion) during the three-year
construction phase, with the remaining 40% ($0.99
billion) paid over a 5-7-year maintenance period
[differing from the NHAI’s 40:60 split over a longer term].
This structure reduces borrowing needs for JNPA and
MMB, with VPPL planning to raise $3.46 billion in long-
term debt (15-20 years) from onshore and offshore
markets. JNPA and MMB will jointly invest $1.5 billion (Rs
13,000 crore) in equity for Phase 1.
Thus, Vadhavan Port’s development under the Hybrid
Annuity Model (HAM) represents an ongoing effort to
establish a robust, long-term risk-sharing structure
between the public and private sectors.
3.3 Standardising Risk-Sharing and Incentives
To further enhance project bankability, India should
establish standardised risk-sharing frameworks and
government-backed guarantees, particularly for greenfield
projects. Infrastructure markets rarely operate on purely
commercial terms, and both developed and developing
economies commonly use incentives to secure investments.
India has already demonstrated success with innovative
tools like the Hybrid Annuity Model, Infrastructure
Investment Trusts (InvITs), and renewable energy offtake
guarantees. Expanding these mechanisms can address
investor concerns by:
• Mitigating Greenfield Risks: offer guarantees for
construction, regulatory, or revenue risks to reduce
uncertainty and improve financial predictability.
• Encouraging Long-Term Viability: use standardised
contracts and risk-sharing models to ensure fair
allocation of risks between public and private sectors,
fostering trust and collaboration.
3.4 Building Investor Confidence Through Transparency
Clear communication about risk ownership and
management throughout the project lifecycle is essential
to securing competitive pricing for international capital
and services. By proactively addressing investor concerns
through transparent DPRs, standardised frameworks, and
targeted guarantees, India can reduce perceived risks,
lower capital costs, and make its infrastructure market
more attractive. This approach will not only enhance the
bankability of projects but also position India as a leader
in delivering transparent, investor-friendly infrastructure
opportunities on the global stage.
$9bn
The total project cost is estimated at $9 billion UK-India Infrastructure Financing Bridge - Year 1 Report
18 19 To attract and retain international capital for India’s
infrastructure projects, it is critical to address investor
concerns about revenue security and ease of repatriation.
Key challenges include foreign exchange (FX) risks,
unpredictable tax environments, and the absence of
long-term financial mechanisms tailored to infrastructure
investments.
By implementing policies that protect returns and
streamline repatriation, India can enhance investor
confidence, reduce financial risks, and position itself as a
competitive destination for global capital. 4.1 Mitigating Foreign Exchange Risks
International investors consistently highlight FX risk as a
barrier, particularly due to the Indian rupee’s perceived
volatility and the lack of long-term hedging instruments
aligned with the 20+ year tenors typical of infrastructure
projects. While India’s FX market supports swaps for up
to seven years, longer-term hedging remains a challenge.
To address this, India could adopt mechanisms inspired
by other emerging markets, such as Mexico, which allow
investments in USD to reduce currency risk exposure. A
potential solution is the introduction of a currency risk pass-
through model, where the procuring authority assumes the
risks - and potential benefits - of currency fluctuations. This
approach would shield investors from FX volatility, making
projects more bankable and appealing to global financiers.
4.2 Addressing Taxation Barriers
Taxation policies, particularly withholding taxes on foreign
exchange lending from offshore entities (e.g., UK bank
branches or subsidiaries), place international capital at
a competitive disadvantage compared to local funding
sources. To encourage greater participation from offshore
investors, India should seek to implement policies to ensure
international companies’ participation on an equitable
basis. India could consider mitigation measures such as a
withholding tax exemption, subject to conditions, specifically
for infrastructure finance. This targeted policy would lower
the cost of capital for foreign investors, levelling the playing
field and incentivising increased investment in India’s
infrastructure sector.
Recommendation 4:
Safeguard Investor Returns Through Revenue Protection and Simplified Repatriation
4.
4.3 Policy Consistency and Government Guarantees
Investors seek assurance that policies supporting equitable
participation and revenue protection will remain stable
throughout a project’s lifecycle. The Indian government can
build trust by:
• Demonstrating Policy Commitment: clearly articulate
and enforce policies that ensure fair treatment of
international investors, with guarantees that these
measures will remain consistent over long-term project
durations.
• Offering Revenue Guarantees: provide government-
backed assurances to protect investor returns against
unforeseen regulatory or economic shifts, such as
changes in tax regimes or revenue streams.
• Facilitating Repatriation: streamline processes for
repatriating profits to reduce bureaucratic hurdles and
enhance investor confidence in accessing their returns. UK-India Infrastructure Financing Bridge - Year 1 Report
20 21 4.4 Strategic Benefits of Revenue Protection
By addressing FX risks, reforming taxation policies, and
ensuring policy stability, India can significantly enhance the
attractiveness of its infrastructure market. These measures
would:
• Lower Financial Risks: Reduce the cost of capital by
mitigating uncertainties related to currency fluctuations
and taxation.
• Attract Long-Term Investment: encourage participation
in capital-intensive, long-term projects by providing
predictable and secure returns.
• Enhance Global Competitiveness: position India as a
reliable and investor-friendly destination, competing
effectively with other emerging markets.
4.5 Implementation Roadmap
To operationalize these recommendations, India may
consider the following:
• Develop Currency Risk Mechanisms: pilot a currency risk
pass-through model for select infrastructure projects,
drawing on global best practices.
• Introduce mitigation measures including Tax Incentives:
enact withholding tax exemptions, with certain
conditions, for offshore infrastructure financing, with
clear eligibility criteria to ensure transparency.
• Strengthen Policy Frameworks: establish a dedicated
task force to ensure policy consistency and communicate
guarantees to investors through platforms like the
Detailed Project Report (DPR).
• Engage International Stakeholders: collaborate with
global investors and financial institutions to design
mechanisms that align with their risk tolerance and
return expectations.
By prioritising revenue protection and ease of repatriation,
India can unlock significant foreign capital inflows, support
sustainable infrastructure development, and solidify its
reputation as a trusted investment destination on the global
stage.
Climate and Energy Transition Finance Initiative (CETFI)
Japan’s Climate and Energy Transition Finance Initiative (CETFI) promotes currency risk mitigation to enhance investor confidence in climate-resilient infrastructure projects. By integrating robust financial and legal frameworks, CETFI stabilizes returns and facilitates cross-border investments. To mitigate currency risk, CETFI offers flexible investment options, allowing investors to use either local or foreign currencies, reducing exposure to exchange rate volatility. For foreign currency investments, CETFI collaborates with institutions like the Japan Bank for International Cooperation (JBIC) to provide hedging tools, such as currency swaps or forward contracts, and risk guarantees. These mechanisms shield investors from losses due to currency fluctuations.
CETFI further employs fixed or indexed payment models to ensure predictable revenue streams, minimizing financial uncertainty. Risk-sharing arrangements between public and private partners distribute currency and project risks, enhancing stability. Government-backed guarantees or support from multilateral institutions add another layer of security, making returns more reliable and easier to repatriate. By creating a transparent and predictable investment environment, CETFI encourages private sector participation in energy transition and climate-focused infrastructure, aligning with global sustainability goals. UK-India Infrastructure Financing Bridge - Year 1 Report
22 23 The UK-India Infrastructure Financing Bridge (UKIIFB)
has introduced a Project Assessment Framework (PAF)
tailored for Year 1 (Y1) deliberations in the highways and
rapid transit sectors (preliminary). Developed in close
collaboration with the Working Group, the PAF outlines
the minimum priorities and expectations of international
investors regarding project preparation and execution.
By providing a standardised, investor-centric tool, the PAF
enhances India’s ability to attract global capital, ensuring
projects are presented in a manner that aligns with
international standards and facilitates effective engagement
with investors. 5.1 Objectives of the PAF
The PAF is designed to serve as a concise, accurate, and
actionable summary of infrastructure projects, enabling
international investors to quickly evaluate opportunities.
It bridges the gap between India’s project development
processes and the expectations of global financiers by
presenting critical project details in a structured, globally
recognised format. Key objectives include:
Recommendation 5:
Utilise the Project Assessment Framework to Meet Global Investor Expectations
5.
Project Assessment Framework: Example Structure
Project
Overview
Market
Assessment
Pre-Feasibility
Assessment
Technical
Feasibility
Procurement
& Financing
Sector
Description of the project
Public/Private
Development
Development Status
Project Authority/Leader
Project Developer and
SPV
Broad sector strategy or
National Programme
Estimated Project Cost
Revenue Sources
Risk
Governance
Demand Assessment
Development
Considerations
Project Benefits
Project Risks
Other Declarations
Local Considerations
Other Declarations
Regulation
Legal
Development
Considerations
Investors and
Financing
Project financing
structure
Internal Rate of Return
Risk Allocation
Impact and Reporting
Design
Revenue
Considerations
Development
Considerations
Construction
Considerations
Operation
considerations
Investors and
Financing
Risk Allocation
Carbon Impact and
Reporting
Other Declarations
Government
Counterparty
Financial Analysis
Impact and Reporting
Other Declarations
Taxes
Legal
Revenue Considerations
Development
Considerations
Construction
considerations
Operation considerations
Investors and Financing
• Standardised Communication: ensures consistency
in how project information, such as scope, financial
structure, risk mitigation, and ESG compliance, is
presented to investors.
• Investor-Centric Design: highlights priorities like
revenue protection, regulatory stability, and long-term
resilience, addressing the core concerns of international
stakeholders.
• Facilitating Early Engagement: acts as a foundational tool
for initiating investor discussions, enabling procuring
authorities to build trust and momentum from the
outset. UK-India Infrastructure Financing Bridge - Year 1 Report
24 25 5.2 Strategic Importance for Attracting Investment
International investors often encounter challenges when
navigating India’s infrastructure market due to inconsistent
or incomplete project documentation. The PAF addresses
this by establishing a clear standard for information quality,
making it easier for investors to assess and compare
opportunities. By adopting the PAF, India can:
• Enhance Project Bankability: present projects in a way
that reduces perceived risks and aligns with global
investment criteria, increasing their appeal.
• Build Investor Trust: provide transparent, reliable
information that fosters confidence and encourages long-
term investment commitments.
• Streamline Decision-Making: enable investors to quickly
evaluate projects, accelerating the investment process
and reducing delays in project financing.
5.3 Integration with Project Development
To maximise its impact, the PAF maybe seamlessly
integrated into India’s project development lifecycle,
particularly within the Detailed Project Report (DPR) process.
Key implementation strategies include:
• Early-Stage Adoption: incorporate the PAF during project
conceptualisation to ensure investor priorities, such as
risk allocation and sustainability, are embedded from the
start.
• Collaboration with Stakeholders: work with the Working
Group, international investors, and financial institutions
to refine the PAF, ensuring it reflects evolving market
expectations and global best practices.
• Capacity Development: train procurement teams, project
developers, and policymakers on the effective use of the
PAF to ensure consistent application and high-quality
project documentation.
• Scalability Across Sectors: while initially focused on
highways and rapid transit, adapt the PAF for other
infrastructure sectors, such as energy or urban
development, to create a unified approach to investor
engagement.
5.4 Operationalizing the PAF
The PAF is not intended as a rigid or definitive tool but
rather as a flexible framework that sets a baseline for the
information required to attract international investment.
To operationalise it effectively:
• Customise for Project Needs: tailor the PAF to highlight
project-specific details while maintaining a standardised
structure for comparability.
• Iterate Based on Feedback: continuously refine the
PAF based on investor input and lessons learned from
initial project engagements to ensure relevance and
effectiveness.
• Promote Transparency: use the PAF to clearly articulate
risks, mitigation strategies, and financial projections,
addressing investor concerns about opacity in emerging
markets.
5.5 Long-Term Benefits
By institutionalising the PAF, India can transform its
infrastructure investment landscape. The framework will:
• Position India as a Global Leader: align project
preparation with international standards, making India a
competitive destination for infrastructure financing.
• Unlock Greater Capital Flows: attract a broader pool of
investors by reducing barriers to entry and enhancing
project credibility.
• Support Sustainable Development: ensure projects meet
global expectations for ESG compliance and resilience,
aligning with long-term economic and environmental
goals.
By leveraging the PAF as a cornerstone of its infrastructure
financing strategy, India can foster stronger partnerships
with international investors, streamline project execution,
and drive sustainable economic growth across critical
sectors. UK-India Infrastructure Financing Bridge - Year 1 Report
26 27 To secure substantial and sustained UK investment in India’s
infrastructure sector, India must prioritise building strong,
long-term relationships with leading global infrastructure
project sponsors, developers, and contractors, particularly
those based in the UK.
In global infrastructure markets, financing often follows
established sponsors into new markets, making strategic
engagement with these stakeholders critical for unlocking
capital flows. By fostering collaborative partnerships
through targeted outreach and sustained dialogue, India
can enhance its appeal as an investment destination and
drive competitive participation in its infrastructure market.
6.1 Importance of Engaging Project Sponsors
Project sponsors, developers, and contractors play a pivotal
role in shaping infrastructure markets, as their expertise,
track records, and networks attract financing from global
investors. UK-based sponsors, with their experience in
delivering high-quality, sustainable projects, are well-
positioned to partner with Indian counterparts to develop
bankable projects.
However, initial perceptions of India as a complex market
may lead to scepticism among UK sponsors. Overcoming
this requires proactive, consistent engagement to build
trust, raise awareness of India’s infrastructure opportunities,
and demonstrate a commitment to facilitating successful
collaborations.
6.
6.2 Strategies for Building Relationships
India can adopt a multifaceted approach to engage UK project sponsors effectively:
• High-Level Delegations: organize delegations to the
UK to meet with key industry players, including major
developers, contractors, and industry associations.
These visits should focus on exploring partnership
opportunities, understanding sponsor priorities, and
addressing concerns about market entry.
• Targeted Roadshows: host investment roadshows in
the UK to showcase India’s infrastructure pipeline,
highlighting projects tailored for international
participation, such as those using Public-Private
Partnerships or the Hybrid Annuity Model. These events
should emphasize India’s policy reforms, risk mitigation
strategies, and alignment with global ESG standards.
• Sustained Dialogue: establish ongoing communication
channels to maintain engagement with UK sponsors,
ensuring regular updates on market developments, policy
incentives, and project opportunities. This long-term
approach will help shift initial scepticism into genuine
interest and collaboration.
• UK-India Contractor Partnerships: facilitate the formation
of Global-India or UK-India consortia to compete in
India’s infrastructure market. These partnerships can
leverage UK expertise in project delivery and Indian
local knowledge to create competitive bids and enhance
project bankability.
Recommendation 6:
Foster Strategic Relationships with UK Project Sponsors to Attract Investment UK-India Infrastructure Financing Bridge - Year 1 Report
28 29 6.3 Leveraging UK Government Support
The UK government can play a pivotal role in fostering these
relationships by:
• Creating Collaborative Forums: establish platforms, such
as UK-India infrastructure summits or working groups,
to bring together Indian authorities and UK sponsors for
knowledge sharing and partnership development.
• Aligning with Existing Initiatives: integrate engagement
efforts with current UK-India corridor initiatives, such as
trade agreements or bilateral investment programs, to
amplify impact.
• Supporting Capacity Building: facilitate training and
knowledge exchange programs to build capacity on both
sides, enabling UK sponsors to navigate India’s market
and Indian stakeholders to meet global project delivery
standards.
6.4 Strategic Benefits
Building relationships with UK project sponsors offers
significant advantages:
• Attracting Financing: strong sponsor relationships will
draw UK and global investors, as financing often follows
reputable sponsors into new markets.
• Enhancing Project Credibility: partnerships with
established UK firms will signal project quality and
reliability, boosting investor confidence.
• Driving Innovation and Expertise: collaboration
with UK sponsors will bring advanced technologies,
sustainable practices, and global best practices to India’s
infrastructure sector.
• Strengthening Market Competitiveness: UK-India
partnerships will create competitive consortia capable
of delivering high-quality projects, positioning India as a
leader in global infrastructure markets.
6.5 Implementation Roadmap
To operationalize this recommendation, India should:
1. Identify Key UK Sponsors: map leading UK infrastructure
sponsors, developers, and contractors with expertise in
highways, rapid transit, or other priority sectors.
2. Plan Strategic Outreach: organize a series of high-level
delegations and roadshows in the UK, supported by
professional marketing consultants to ensure impactful
messaging.
3. Establish a Coordination Entity: create a dedicated
team within a relevant ministry or agency to manage
relationships with UK sponsors and coordinate
engagement efforts.
4. Leverage the PAF: use the UKIIFB’s Project Assessment
Framework (PAF) to present projects to UK sponsors in a
standardized, investor-friendly format.
5. Monitor Progress: track the outcomes of engagement
efforts, gathering feedback from UK sponsors to refine
strategies and address barriers. 6.6 Long-Term Impact
By prioritizing strategic relationships with UK project sponsors, India can transform its infrastructure investment landscape.
These partnerships will not only unlock significant capital
inflows but also foster knowledge transfer, enhance project
delivery standards, and build a robust track record of
successful international collaborations.
Over time, this approach will position India as a trusted and
competitive destination for global infrastructure investment,
driving sustainable economic growth and strengthening UK-
India bilateral ties.
Image: Houses of Parliament, London UK-India Infrastructure Financing Bridge - Year 1 Report
30 31 To bolster investor confidence and improve governance
in India’s infrastructure sector, leveraging Digital Public
Infrastructure (DPI) is critical. DPI offers a transformative
opportunity to address persistent challenges in
transparency, accountability, and efficiency across the
infrastructure project lifecycle.
By integrating digital tools into procurement, project
execution, and asset monetization, India can mitigate risks,
streamline processes, and align its infrastructure pipeline
with international investor expectations, thereby enhancing
its appeal as a global investment destination.
7.
7.1 Addressing Transparency Challenges
A significant barrier to attracting international investment is the perceived opacity in India’s infrastructure processes, particularly in auctioning, bidding, and supply chain management. These processes, often managed between Special Purpose Vehicles (SPVs) and local authorities, lack adequate digital oversight, leading to governance gaps, especially with tier 1 and tier 2 suppliers, including subcontractors handling labour, vehicles, and materials. This opacity increases risks, erodes investor trust, and complicates project delivery. Mandating DPI for projects exceeding a threshold—such as US$10 million—can enhance transparency by:
• Digitising Procurement and Bidding: implementation
of digital platforms to ensure open, competitive, and
auditable bidding processes, reducing instances of
favouritism and irregularities.
• Real-Time Oversight: this can be achieved through use
of project tracking dashboards to monitor construction
progress, subcontractor performance, and compliance
with contractual obligations.
• Supply Chain Accountability: integration of digital tools
to track supplier and subcontractor activities, ensuring
transparency and mitigating risks associated with labour
and material procurement.
Recommendation 7:
Enhance Project Transparency and Governance Through Digital Public Infrastructure UK-India Infrastructure Financing Bridge - Year 1 Report
32 33 7.2 Strengthening NIP and NMP Through DPI
India’s National Infrastructure Pipeline (NIP), targeting
US$1.5 trillion by 2025, and National Monetisation
Pipeline (NMP), aiming to monetize US$75 billion in public
assets, have laid a strong foundation for infrastructure
development and asset optimization. These initiatives
have introduced some level of digital transparency by
showcasing project pipelines online, attracting private sector
participation, and supporting economic growth. However,
challenges persist in bidding transparency, project execution
oversight, and post-monetization monitoring. Strengthening
these initiatives with DPI can address these gaps and align
them with international investor expectations:
• Digital Procurement Systems: introduce automated
procurement platforms for NIP projects to ensure fair
competition, reduce inefficiencies, and provide auditable
records.
• Real-Time Performance Monitoring: deploy dashboards
for NMP assets to track performance metrics, ensuring
effective management and investor confidence in
monetized assets.
• Prioritization and Ringfencing: curate a subset of high-
potential projects within the NIP and NMP, using DPI
to present prioritized opportunities in a clear, investor-
friendly format to navigate the daunting scale of India’s
pipeline.
7.3 Strategic Benefits of DPI Integration
Integrating DPI into infrastructure projects offers multiple
advantages:
• Enhanced Investor Confidence: transparent, digital
processes reduce perceived risks, making projects more
attractive to international investors seeking accountability
and governance.
• Improved Efficiency: automated systems streamline
complex processes like bidding, contract management,
and payments, reducing delays and costs.
• Risk Mitigation: real-time tracking and auditable records
minimize governance gaps, fraud, and mismanagement,
particularly in subcontractor ecosystems.
• Alignment with Global Standards: DPI adoption signals
India’s commitment to modern, transparent practices,
aligning with investor expectations for ESG compliance
and operational excellence.
Enhancing transparency and governance
through Digital Public Infrastructure (DPI):
India’s use of Digital Public Infrastructure (DPI) in
major infrastructure projects has notably improved
transparency, efficiency, and investor confidence.
The National Highways Authority of India’s Online
Contract Management System (OCMS) digitizes the
entire project cycle, allowing real-time tracking and
ensuring fair competition in procurement. Similarly,
the Eastern Dedicated Freight Corridor (EDFC), led
by Dedicated Freight corridor corporation of India
limited (DFCCIL) under the Ministry of Railways,
uses digital tools like integrated project monitoring
and automated control centres to smoothen land
acquisition and freight operations. These digital
systems minimize regulatory opaqueness and
execution delays, creating a more predictable and
investor-friendly environment.
7.4 Implementation Roadmap
To effectively leverage DPI, India should:
1. Mandate DPI for Large Projects: require digital tools for
projects above US$10 million, integrating platforms for
procurement, tracking, and supply chain management.
2. Enhance NIP and NMP Platforms: upgrade existing digital
interfaces for NIP and NMP to include real-time data,
investor-friendly dashboards, and prioritized project lists.
3. Engage Technology Partners: collaborate with global
technology providers to develop secure, scalable DPI
solutions tailored to infrastructure needs.
4. Build Capacity: train procurement teams and local
authorities on DPI tools to ensure effective adoption and
consistent implementation.
5. Pilot and Scale: launch pilot projects using DPI in select
NIP and NMP initiatives, refining tools based on feedback
before scaling nationwide.
7.5 Long-Term Impact
By embedding DPI into its infrastructure ecosystem, India
can transform its project delivery and asset monetization
processes. This approach will not only address governance
and transparency challenges but also position India
as a leader in leveraging technology for sustainable
infrastructure development.
A transparent, digitally enabled pipeline will attract global
capital, maximize the impact of NIP and NMP initiatives,
and drive long-term economic growth, cementing India’s
reputation as a reliable and forward-thinking investment
destination. UK-India Infrastructure Financing Bridge - Year 1 Report
34 35 International stakeholders perceive India’s infrastructure
sector to be dominated by a few large Engineering,
Procurement, and Construction (EPC) firms and financial
institutions, whose deep local expertise and economies
of scale limit opportunities for mid-tier construction
companies. This market concentration stifles the growth of
a diverse, innovative ecosystem, reducing the sector’s global
competitiveness and deterring international firms, who
struggle to find reliable local partners for effective project
delivery. To address this, India must adopt bold strategies to
nurture mid-tier firms, fostering a vibrant, inclusive market
that attracts global capital and enhances project execution.
8.1 Challenges of Market Concentration
Dominant EPC firms leverage their extensive networks,
regulatory familiarity, and cost advantages to secure major
projects, marginalizing mid-tier firms. This results in:
• Limited Growth Opportunities: mid-tier firms lack access
to high-value projects, hindering their ability to build
capacity or credibility.
• Innovation Barriers: concentration discourages adoption
of new technologies and sustainable practices, as
dominant firms prioritize cost over innovation.
• Shallow Market Depth: the absence of a robust mid-tier
ecosystem limits the sector’s ability to scale or adapt to
diverse project needs.
8.2 Impact on International Participation
International firms, bringing global expertise and capital,
rely on credible mid-tier partners to navigate India’s
complex market. The scarcity of such firms creates:
• Partnership Challenges: without experienced mid-tier
companies, international firms struggle to form reliable
alliances for efficient project execution.
• Elevated Risks: dependence on untested smaller entities
increases risks of delays, quality issues, or regulatory
non-compliance.
• Reduced Investor Confidence: uncertainty about
partnerships discourages international firms from
investing in bids or market entry.
8.3 Importance of a Mid-Tier Ecosystem
A thriving mid-tier ecosystem is vital for:
• Driving Competitiveness: mid-tier firms foster innovation,
specialization, and alignment with global Environmental,
Social, and Governance (ESG) standards.
• Enhancing Scalability: a diverse ecosystem supports
a wide range of projects, aligning with the National
Infrastructure Pipeline (NIP) ambitions.
• Attracting Global Capital: reliable mid-tier partners give
international firms confidence to invest, combining global
expertise with local capabilities.
8.
8.4 Strategies to Build a Mid-Tier Ecosystem
India can foster mid-tier growth through:
• Capacity Building: offer training programs to enhance
technical, financial, and governance skills, enabling mid-
tier firms to meet global standards.
• Project Allocation: reserve NIP projects for mid-tier firms
or consortia to build experience and credibility.
• Partnership Incentives: provide tax breaks or streamlined
approvals to encourage collaborations between
international and mid-tier firms.
• Digital Connectivity: use Digital Public Infrastructure (DPI)
to create platforms connecting mid-tier firms with global
players, enhancing visibility.
• Mentorship Programs: facilitate knowledge transfer from
dominant EPC firms or international partners to mid-tier
companies, sharing best practices.
8.5 Long-Term Benefits
By nurturing mid-tier firms, India can:
• Diversify the Market: reduce dependence on dominant
players, fostering innovation and resilience.
• Boost Investor tust: Provide reliable partners, lowering
entry barriers for international firms.
• Promote Sustainable Growth: align mid-tier firms with
ESG and climate-resilient goals, enhancing project appeal.
This strategic focus will deepen India’s infrastructure market,
attract global investment, and establish the country as a
competitive, inclusive leader in sustainable infrastructure
development.
Recommendation 8:
Foster a Competitive Infrastructure Ecosystem by Supporting Mid-Tier Firms
Image: Ambala to Kotputli Axis Control Corridor UK-India Infrastructure Financing Bridge - Year 1 Report
36 37 In addition to the eight
recommendations outlined above,
India may wish to consider how it can
continue to strengthen its investment
environment and international
competitiveness.
Further Considerations for Enhancing
India’s Investment Landscape
As India builds on the momentum of its infrastructure
ambitions, there are valuable lessons to draw from the
UK’s evolving approach to attracting investment, as well
as strategies employed by other jurisdictions that have
successfully positioned themselves as global investment
destinations. The following areas highlight opportunities for
deeper reflection and future action:
1. Strengthening Market Engagement to Build Investor
Confidence
While India has made significant strides in improving its
ease of doing business and institutional capacity, investor
perceptions of risk and complexity remain a barrier.
International investors continue to view India as a high-
potential but challenging market, particularly for greenfield
infrastructure projects with limited precedent for private-
sector delivery.
There is scope for India to further develop a structured and
sustained market engagement strategy. This could involve:
• Ongoing dialogue with global investors to showcase
opportunities, policy reforms, and risk mitigation
mechanisms;
• Professionalising the marketing of India’s infrastructure
pipeline, including through tailored investor
communications and transparent project packaging;
• Drawing from global examples—such as the UAE and
Southeast Asian markets—where consistent, targeted
outreach has successfully built investor trust and visibility
over time.
Proactive engagement, anchored in transparency and
consistency, can help shift perceptions and signal India’s
commitment to being a long-term, investor-friendly market.
2. Curating a Cohesive and Investible Project Pipeline
India’s infrastructure pipeline is vast, but its complexity can deter international capital. Investors often struggle to identify projects that align with their risk appetite, ESG priorities, or financing models. To address this, India could consider enhancing the structure and presentation of its pipeline to better align with global investor expectations.
Key considerations include:
• Prioritising and packaging projects that are most suitable
for international investment, particularly those with clear
risk-sharing models and predictable revenue streams;
• Leveraging familiar frameworks, such as PPPs, InvITs, and
the Hybrid Annuity Model, to enhance project bankability;
• Using standardised tools like the UK-India Infrastructure
Financing Bridge’s Project Assessment Framework (PAF)
to ensure clarity and comparability.
A curated and clearly communicated pipeline not only
increases investor confidence but also facilitates repeat
investment and long-term engagement.
3. Enhancing Investor Navigation and Market Access
India could further improve the investor experience by
providing streamlined access to information, guidance,
and credible local partnerships. A “concierge” approach—
common in leading investment promotion agencies—could
support this goal. Such a function would:
• Act as a central point of contact for international
investors;
• Offer tailored guidance on project opportunities, local
regulations, and partnership development;
• Provide transparency and consistency in communications
with prospective investors.
This kind of investor-facing infrastructure is increasingly
seen as a competitive differentiator among emerging
markets.
India’s National Infrastructure Pipeline:
India has introduced the National Infrastructure Pipeline (NIP) and the Climate Resilient Cities initiative in part to offer investors a consolidated view of the Indian infrastructure market. NIP is a government initiative focused on boosting infrastructure development across various sectors. It’s a comprehensive investment plan spanning from 2019 to 2025, aiming to improve infrastructure access and promote inclusive growth. The NIP includes both greenfield and brownfield projects with a total projected capital expenditure of ₹111 trillion.
The Department of Economic Affairs (DEA) led a task force in developing the NIP. The NIP includes a monitoring mechanism to track progress and address potential delays. These types of consolidated initiatives are being increasingly used by jurisdictions, to plan major projects and present them to investors. In Brazil, the Ministry of Infrastructure and the National Land Transport Agency (ANTT) in Brazil serves as a knowledge centre which has and builds expertise and can ensure that all the appropriate steps are taken in developing infrastructure projects and facilitating PPP activities. Some of these bodies also provide a communication channel to investors, helping bidders and financiers with information and opportunities, as well as providing contract management after financial close. UK-India Infrastructure Financing Bridge - Year 1 Report
38 39 By continuing to refine its investor engagement and
project preparation efforts, India has the opportunity
to position itself as a leader in global infrastructure
investment. Drawing from the UK’s project finance
expertise, and learning from the strategies of other
successful jurisdictions, India can further unlock
capital, build trust, and drive sustainable growth.
Looking Ahead UK-India Infrastructure Financing Bridge - Year 1 Report
40 41 The United Kingdom-India Infrastructure Financing Bridge (UKIIFB)
is a collaboration between the City of London Corporation and the
National Institution for Transforming India (NITI Aayog).
About NITI Aayog and City of London Corporation
National Institution for Transforming India
The National Institution for Transforming India (NITI
Aayog) is the premier policy think tank of the Government
of India. Formed via a resolution of the Union Cabinet
on 1 January 2015, NITI Aayog provides technical and
policy inputs towards development of long-term policies
and programmes of the Government of India, State
Governments and Union Territories. The Governing
Council of NITI Aayog is chaired by the Prime Minister,
and comprises Chief Ministers of all the States and Union
Territories with legislatures and Lt Governors of other Union
Territories as members.
Appendix - Report Context
City of London Corporation
The City of London Corporation (CoLC) is the governing body for London’s main financial district, the Square Mile. The CoLC promotes the UK as a leading global hub for financial and professional services (FPS). As a trusted convener, it connects firms with governments and regulators, engaging on policy and regulation while championing trade and investment. A key part of its work is engaging with UK and international policymakers to help remove trade and investment barriers and enable FPS firms to do more business across borders. CoLC is committed to a thriving, sustainable City that supports a globally successful UK.
The UKIIFB aims to:
• Accelerate the mobilisation of international private sector
investment into Indian sustainable infrastructure
• Develop best practices and share sector knowledge
on sustainable infrastructure projects and how these
can be better positioned as investible and attractive to
international investors
• Deliver structured recommendation for demonstrator
projects, focusing on sustainable infrastructure
development
The initiative leverages the UK’s expertise in designing,
structuring and phasing major projects to unlock
sustainable infrastructure investment into India from
international investors. The UKIIFB was announced at the
12th Economic and Financial Dialogue between the UK and
India which took place New Delhi in September 2023. Work
began in February 2024 and the official launch took place in
London on 4th September 2024. The initiative is to run for 2
years, completing its work in 2026. This report is the first of
two instalments.
The UKIIFB is led by its Honorary Co-Chairs; Chris Hayward,
Policy Chairman of the City of London Corporation, and BVR
Subrahmanyam, CEO of NITI Aayog.
The work in the UK has been led from the Innovation and
Growth Department at the City of London Corporation led
by Simi Shah, Director, alongside Meenu Niranjan based
in London and James Hannah based in Mumbai. The work
in India has been led by Sanjeet Singh, Senior Advisor at
NITI Aayog, alongside CPS Reddy, Advisor with support
from Muskan Agarwal and Devyanshi Didwania – Young
Professional, NITI Aayog, in New Delhi. The knowledge
partner is 3B Impact, an independent consultancy based
in the UK. 3B Impact’s work on this programme is led by
John Kjorstad and Kay Scott, subject-matter experts with
more than twenty years of experience in global energy and
infrastructure development and finance. UK-India Infrastructure Financing Bridge - Year 1 Report
42 43 The work in the UK is steered by individuals from HM
Treasury, Aon, Arup, Mott MacDonald, Clifford Chance and
Sequoia Investment Management Company. The work in
India is represented by individuals from Department of
Economic Affairs, Larsen & Toubro, Sorin Investment Fund,
Economic Laws Practice and AECOM India Private Limited.
Together they form the UKIIFB Working Group and a full list
of members follows below.
The UKIIFB has benefitted throughout its operation from
the consistent and proactive support of both the High
Commission of India in the UK and the High Commission of
the UK in India. We would like to acknowledge and thank
both organisations for their ongoing commitment. Honorary Co- Chairs
•Chris Hayward, Policy Chairman, City of London
Corporation
•B.V.R Subrahmanyam, CEO, NITI Aayog
Working Group Co-chairs
•Sanjeet Singh, Senior Adviser, Trade & Commerce,
Economic & Finance, Disinvestment, International
Cooperation & G-20 Co-ordination, NITI Aayog
•Simi Shah, Director, Innovation and Growth, City of
London Corporation
•UK Working Group Member Representation
•Simon Harris - Managing Director, International
Development Services Unit, Mott MacDonald.
•Sowmya Parthasarathy - Director, Urban Design and
Master planning, Arup
•Mark Courtneidge - Client Director, Aon
•Jenny Young - Deputy Director, His Majesty’s Treasury
(HMT)
•Sohini Kar-Purkayastha - Project Finance Counsel, Clifford
Chance LLP
•Anurag Gupta - Chief Risk Officer, Sequoia Investment
Management
•Indian Working Group Member Representation
•Baldeo Purushartha - Joint Secretary, Department of
Economic Affairs, Ministry of Finance
•Anmol R Soni, Executive Vice President & Head, Corporate
Affairs, Larsen & Toubro
•Sanjay Nayar - Founder & Chairman, Sorin Investment
Fund
•Sanjay Notani - Partner, Economic Laws Practise
•Dinesh Arora - Tech Director, AECOM India Private Limited
•P S Reddy - Advisor, NITI Aayog
Additional support has been given from Clifford Chance
from Nandini Das, Project Finance Lawyer and Adrian
Cartwright, Global Senior Partner.
The India Working Group visited London twice in the first
year and the UK side travelled to Mumbai and Delhi in
November 2024. Together, the Working Group has created
Project Assessment Frameworks – one template each for
the identified sectors of interest rapid transit and highways
– and reviewed demonstrator projects against these
frameworks. These reviews gave rise to both the asset level
feedback and has prompted the wider recommendations
included in this report.
An executive summary emphasises the key points
and recommendations taken from the first full year of
programme work.
The body of the report details the insights shared between
UK and Indian counterparts and translates the discussions
under the UKIIFB around interventions to increase the
flows of international capital and professional services to
sustainable infrastructure projects in India.
The report also references the results of 3B Impact’s
research conducted in June 2024, which set out to better
understand current international investor and lender
perspectives on the wider Indian infrastructure market
and the sectors of interest. This research has been used
as a high-level view to frame wider project discussions
and inform the recommendations in this report. Where
appropriate it references the relevance of comparative
market case studies from other high markets. UK-India Infrastructure Financing Bridge - Year 1 Report
44 45
About the Global City campaign: About the City of London Corporation:
The Global City campaign is the City of London Corporation’s
overarching initiative to promote the UK as a world-leading
international financial centre. It showcases the UK as a great
place for financial and professional services firms to invest,
locate and grow.
The City of London Corporation is the governing body of
the Square Mile dedicated to a vibrant and thriving City,
supporting a diverse and sustainable London within a
globally successful UK.
We aim to:
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UK-India Infrastructure Financing Bridge
Year 1 Report - September 2025 UK-India Infrastructure Financing Bridge - Year 1 Report
Contents
Foreword 4
Executive Summary 6
Key Recommendations 8
Further Considerations for Enhancing India’s Investment Landscape 38
Looking Ahead 40
Appendix - Report Context 42
Image: Mumbai City skyline
32 India is one of the world’s most exciting investment
destinations — a rapidly growing economy with ambitious
infrastructure goals and a clear commitment to sustainability.
But realising the full potential of international capital flows into
India’s infrastructure sector requires partnership, trust, and
reform.
The UK India Infrastructure Financing Bridge (UKIIFB) is a
first-of-its-kind initiative designed to meet this challenge —
by matching India’s infrastructure needs with global capital
and UK expertise in sustainable project finance. This report
captures the progress made in the Bridge’s first year and sets
the stage for deeper collaboration.
Led jointly by the City of London Corporation and NITI Aayog,
and supported by an expert working group drawn from both
countries, the UKIIFB is helping to unlock investment into
strategic sectors such as roads and rapid transit. At its core
is a shared recognition: international investors need clarity,
confidence and consistency — and India’s economic growth
ambitions deserve a financing model that matches their scale.
India has been steadfast in its commitment to creating a
sustainable and resilient infrastructure ecosystem that
supports inclusive economic growth. As we continue to pursue
our national development priorities, catalysing international
capital into sustainable infrastructure remains an essential part
of this journey.
The UK-India Infrastructure Financing Bridge (UKIIFB) was
launched on 12th September 2023 under the Joint Statement
of the 12th Economic and Financial Dialogue (EFD) between
India and the UK, followed by the subsequent exchange
of letters between NITI Aayog and the City of London
Corporation in September 2024 in London. It is a timely
initiative that reflects our continued efforts to foster cross-
border collaboration and bring global expertise to accelerate
investment into India’s infrastructure sector. I am glad to note
that in its first year, the UKIIFB has made important progress—
developing practical tools such as the Project Assessment
Framework, facilitating rich policy dialogue, and aligning project
preparation processes with global investor expectations.
Foreword
This report provides a compelling case for change. It identifies practical steps to make Indian infrastructure projects more investible, including a new Project Assessment Framework developed to align with global standards. It highlights the importance of risk transparency, sustainability, and a shift in mindset — from project-centric to deal-centric thinking. And it outlines how deeper partnerships between Indian sponsors and UK financial institutions can accelerate the flow of capital.
The UKIIFB is emblematic of the type of high-impact, practical
cooperation that will define the UK-India relationship in
the years ahead. This work supports India’s $4.5 trillion
infrastructure ambition while reinforcing the UK’s role as a
trusted global financial partner.
We thank all contributors to this first-year programme and look
forward to building on this foundation. The opportunity ahead
is immense. Together, we can drive capital where it is needed
most — to power sustainable, inclusive, and long-term growth.
Chris Hayward Policy Chairman, City of London Corporation
Shri B.V.R. Subrahmanyam CEO, NITI Aayog
I may add that this work comes at a critical juncture for India, as we expand our infrastructure footprint in line with the ambitions of the National Infrastructure Pipeline and Gati Shakti. The collaboration with UK stakeholders has provided valuable insights into how we can further enhance project bankability, integrate sustainability, and de-risk capital flows to attract high-quality investment.
I congratulate the teams at NITI Aayog, the City of London
Corporation, and our technical and sectoral partners for
their work in advancing this initiative. I appreciate the
continued support of stakeholders from both countries who
have contributed to this effort and helped strengthen the
foundation for future progress.
I request policymakers, investors, and practitioners to carefully
consider the findings of this report and work together to
unlock India’s infrastructure potential. I am confident that
through shared commitment and sustained action, we can
shape a future that is prosperous, green, and inclusive for all.
5 UK-India Infrastructure Financing Bridge - Year 1 Report
4 This report marks the first year of the UK-India Infrastructure Financing
Bridge (UKIIFB) and comprises a set of insights and recommendations
that have been surfaced from Working Group deliberations, as well as a
series of interviews with investors and other stakeholders.
Executive Summary
India is fast emerging as the world’s fourth largest economy
and is pegged to be the fastest growing major global
economy. Sustainable infrastructure is critical for India’s
economic trajectory - while fulfilling its net-zero climate
commitments. The UKIIFB has been established to build
collaboration between the UK and India in the development
of an international project finance sector to meet the
demand for infrastructure growth on sustainable terms.
India’s infrastructure demand is underpinned by rapid
urbanisation, and a large rising middle class, resulting in
substantial infrastructure deficits and opportunities. India’s
focus on global priorities, including energy transition and
sustainability, has further increased its appeal to investors.
Proactive government measures to address concerns
around governance, such as the Insolvency and Bankruptcy
Code and ongoing regulatory enhancements, have further
strengthened the investment climate; enabling greater
private sector participation and creating a more predictable
framework for international investors.
Additionally, the government has taken significant steps to
improve the bankability of infrastructure projects through
interventions and incentives such as the Hybrid Annuity
Model (HAM), land acquisition guarantees, and the removal
of connection tariffs in renewable energy.
India’s dynamic growth trajectory calls for an estimated $4.5
trillion investment in infrastructure by 2030, encompassing
cost escalations, green initiatives, and transformative
projects like 100 smart cities and enhanced connectivity.
Major projects are increasingly drawing international private
sector interest, particularly in centrally owned, operational
brownfield and yellowfield initiatives. While international
investment in renewables remains focused on photovoltaic
solar and wind energy, greenfield projects face challenges in
attracting global capital due to limited revenue track records
and uncertainties in planning and construction. To fully
tap into greenfield potential, India is focused on enhancing
project preparation, strengthening delivery frameworks,
and improving risk mitigation strategies. There is also a
growing emphasis on evaluating all capital (domestic and
international) through a value-for-money perspective rather
than just cost. The UK-India Infrastructure Financing Bridge
(UKIIFB) has prioritised these discussions, with its Year One
recommendations reflecting this strategic focus.
There was also some acknowledgement from stakeholders
that perception played a role in their dimmed enthusiasm
for Indian projects. Much of these perceptions lingered
from past several decades, rather than recent experiences
by the stakeholders. As an example, losses incurred by
early investors in the early 2010s have made investors
cautious about the underlying opportunity of investing in
Indian infrastructure in the present. There is both a lack
of understanding of how the market has changed and, in
some instances, some reticence to making the investments
needed to build this understanding – although this isn’t
universal and most investors showed interest in the Indian
market.
The UK brings deep and distinctive strengths to the
challenge of infrastructure investment. As a global hub
for project finance, legal services, institutional investment,
and green finance, the UK has decades of experience
structuring complex, large-scale infrastructure deals that
deliver long-term value. Its regulatory frameworks, risk
allocation models, and public-private partnership expertise
are internationally recognised and widely emulated. The UK
is also home to many of the world’s leading infrastructure
investors, advisers, and developers — institutions that
not only bring capital but also a track record of delivering
resilient, sustainable infrastructure across markets. This
unique ecosystem enables the UK to offer strategic insights,
practical tools, and investor-aligned frameworks that can
support countries like India in unlocking international capital
at scale.
This report examines how India can capitalise on the
promise of scale and returns, and the critical steps that need
to be taken in order to engage the international finance
community effectively. As well as how UK can play a role in
supporting that transition.
It is clear that the opportunity in India is real and the
potential for scale is unique amongst its peers. Yet the shift
in investor appetite is not expected to happen overnight.
The opportunity in sustainable infrastructure is tempered
by real and perceived issues. And the best way forward is
that both the UK and Indian Governments comprehensively
articulate those issues objectively and communicate a clear
strategy for how they will help the market address them.
The Key Recommendations section bring together an initial
set of interventions that have arisen during discussions and
engagement in Year 1 of the UKIIFB.
$4.5tn
India’s dynamic growth trajectory calls for an estimated $4.5 trillion investment in infrastructure by 2030 UK-India Infrastructure Financing Bridge - Year 1 Report
67 The global interest in India’s infrastructure market is undeniable,
but converting this enthusiasm into concrete investments requires
a strategic overhaul. By adopting a ‘deal-centric’, value-focused,
and risk-aware approach, India can overcome perception barriers
and compete effectively in the global investment landscape.
These recommendations provide a roadmap to align infrastructure
opportunities with investor priorities, ensuring India emerges as a
top destination for international capital.
Key Recommendations
To attract substantial international investment in India’s
infrastructure, a profound shift in mindset is imperative
before implementing new practices. This transformation
goes beyond procedural changes, requiring a strategic
reorientation that prioritizes investor appeal and global
competitiveness. The key is to adopt an investor-centric
approach that aligns with the priorities of risk, value,
and returns, while addressing outdated perceptions and
bridging the gap between global interest and tangible
investment actions.
Core Elements of the Mindset Shift
From Project-Centric to Deal-Centric Focus i
Historically, infrastructure development in India has centred on individual projects, often presented as standalone initiatives with limited appeal to global investors. A deal-centric approach reframes these projects as integrated investment opportunities, bundling financing, execution, and long-term benefits into compelling packages. By crafting deals that address investor needs - such as clear timelines, stakeholder alignment, and profitability - this approach makes projects more attractive, fostering trust and encouraging capital commitment. Instead of pitching a single highway project, a deal could encompass a network of highways with integrated tolling systems, maintenance contracts, and public-private partnership structures, offering a cohesive investment opportunity.
Prioritizing Long Term Value Over Cost-of
Capital
ii
• Focusing solely on cost-of-capital (e.g., interest rates or
financing costs) often undervalues the broader economic
and social benefits of infrastructure projects, such as
job creation, regional development, and sustainability.
Highlighting long-term value aligns with global investors’
goals of sustainable returns and societal impact.
• Projects that demonstrate enduring value, such as
renewable energy grids or smart cities, are more likely
to attract investors seeking stable, long-term gains over
short-term cost savings.
• A solar power project should emphasize its contribution
to India’s renewable energy goals, reduced carbon
emissions, and predictable revenue streams, rather than
just the upfront financing costs.
Image: Mumbai skyline UK-India Infrastructure Financing Bridge - Year 1 Report
--
89 Embracing an Investor-Centric Approach v
• Global investors prioritize risk, value, and returns above
all else. An investor-centric strategy tailors’ proposals to
these priorities, ensuring projects are structured to meet
international standards and expectations.
• By aligning with investor needs, India can position itself
as a competitive destination, overcoming perceptions
rooted in past decades of bureaucratic or regulatory
challenges.
• Offering clear exit strategies, such as buy-back clauses or
secondary market options for infrastructure assets, can
appeal to investors seeking liquidity and flexibility.
The importance of this mindset shift cannot be overstated.
India’s favourable economic growth and young demographic
profile are compelling, but they alone are insufficient to
secure investment in a highly competitive global market.
Countries like Singapore, Vietnam, and the UAE also strive
for international capital, offering streamlined processes and
investor-friendly environments. A sales strategy that fails to
incorporate these investor-centric principles, or relies solely
on India’s macroeconomic narrative, will struggle to convert
interest into action.
Moreover, stakeholder feedback highlights that lingering
negative perceptions, often based on outdated experiences
from past decades, continue to dampen enthusiasm for
Indian infrastructure projects. These perceptions - related
to bureaucratic delays, regulatory opacity, or project
execution risks - create a significant barrier for new and
large investors. To overcome this, India must not only select
high-potential opportunities but also design and present
them in ways that address investor concerns with clarity and
foresight. The persistent gap between global interest and
actual investments underscores the urgency of adopting a
strategic, investor-focused approach.
Shifting from Rigid Specifications to Robust
Risk Management
iii
• Traditional infrastructure proposals often rely on rigid
technical specifications, which can deter investors by
limiting flexibility and ignoring uncertainties. A risk-
focused approach proactively identifies, mitigates, and
communicates risks, addressing investor concerns head-
on.
• Transparent risk management - covering regulatory,
financial, and operational risks - builds confidence and
differentiates India from other markets where risks may
be less clearly articulated.
• Example: For a port development project, detailing
mitigation strategies for environmental regulations,
labour disputes, or geopolitical risks can reassure
investors of the project’s viability.
Evaluating Total Project Costs Beyond Capital
Expenditure
iv
• Quoting only capital expenditure (capex) overlooks
ongoing costs like operations, maintenance, and lifecycle
expenses, which can significantly impact investor returns.
Presenting total project costs provides a comprehensive
financial picture, enabling better decision-making.
• This transparency ensures investors understand the
full scope of their commitment, reducing surprises and
enhancing trust in India’s infrastructure market.
• Example: A railway project proposal should include not
just construction costs but also maintenance, operational
staffing, and technology upgrades over the project’s
lifespan.
These recommendations aim to attract a diverse pool of
international investors, secure optimal pricing, and expedite
infrastructure development while bolstering investor
confidence and establishing India as a global leader in
managing investment risks within emerging markets.
For India, adopting this approach promises long-term
advantages, including sustainable economic growth,
enhanced global competitiveness, and access to the
expertise and resources of international partners. Each
recommendation is paired with a notable advancement in
Indian infrastructure, showcasing the country’s openness
and commitment to welcoming global capital.
These examples, drawn from significant central and
operational assets, serve as illustrative cases that highlight
the strategic direction and intent of India’s infrastructure
investment landscape. UK-India Infrastructure Financing Bridge - Year 1 Report
10 11 To attract international investment and build investor
confidence, India’s procurement teams should adopt
globally recognised frameworks, such as the UK’s Five Case
Model
1
, to guide project development from inception.
This investor-centric approach provides a structured
methodology that addresses strategic, economic,
commercial, financial and management dimensions,
effectively mitigating perceived risks and aligning projects
with international expectations.
Currently, India’s Detailed Project Report (DPR) process
focuses primarily on technical and financial aspects. To
enhance its effectiveness, the DPR framework should
evolve to incorporate a more comprehensive perspective,
integrating critical elements like project resilience,
sustainability, and robust risk management, which are the
key priorities for global investors. By embedding these best
practices early in the project lifecycle, rather than using
them as a presentation tool in later stages, India can ensure
that projects are designed and executed to meet world-class
standards.
To achieve this, significant investment in capacity building
is essential. Training and upskilling procurement teams and
project developers will enable them to effectively implement
these frameworks, fostering consistency and transparency.
This strategic alignment with global standards will not only
enhance the credibility of Indian projects but also position
India as a competitive destination for international capital,
driving sustainable economic growth
1 “The Five Case Model is the UK government’s best practice approach to developing spending proposals and enabling effective business decisions. It provides a
disciplined, step-by-step approach that helps to ensure that projects and programmes are supported by a robust and transparent business case.”— Source: HM
Treasury Green Book, “Guide to Developing the Project Business Case” (2022)
Promising Innovation Box Out: Noida Airport
Aligning project development with global standards
can enhance investor confidence, and India has
already made significant strides in strengthening its
infrastructure project frameworks through well-
established Public-Private Partnership models. Over
the past year, several large-scale infrastructure
projects have successfully demonstrated India’s
ability to balance risk, ensure financial viability, and
attract global investments. A prime example is the
Jewar International Airport (Noida International
Airport) project, which is being developed under
a Public-Private Partnership model with Zurich
Airport International Airport as the concessionaire.
This project has incorporated best practices in
risk-sharing, financial structuring, and long-term
sustainability, setting a benchmark for large-scale
infrastructure development.
Recommendation 1:
Enhance Project Development by Aligning with Global Standards
1.
Image: Noida Airport UK-India Infrastructure Financing Bridge - Year 1 Report
12 13 To position India as a prime destination for international
capital, infrastructure projects must proactively integrate
sustainability and long-term resilience, aligning with global
investor priorities. These priorities encompass two critical
dimensions: adherence to Environmental, Social, and
Governance (ESG) commitments and the incorporation of
robust resilience measures to ensure project viability and
mitigate risks. finance capital.
2.1 Aligning with Global ESG Standards
International investors, including banks and construction firms, prioritize ESG compliance, with firm commitments to decarbonising portfolios and meeting sustainability targets, such as those outlined in the United Nations Sustainable Development Goals (SDGs). Projects lacking objective, measurable ESG metrics are less likely to secure funding, as investors seek alignment with their environmental and social goals. The Working Group has noted a potential misalignment between domestic and international ESG compliance expectations. To bridge this gap, India must adopt globally recognised sustainability frameworks from the outset of project planning. By embedding ESG principles into the Detailed Project Report (DPR) process, projects can demonstrate credible commitments to environmental stewardship, social responsibility and governance transparency, thereby reducing perceived risks and appealing to international investors.
2.2 Embedding Long-Term Resilience
Beyond ESG compliance, resilience is a cornerstone of sustainable infrastructure. Investors increasingly prioritise projects designed to withstand long-term environmental, economic, and operational challenges to avoid stranded assets. This requires integrating adaptive design principles, such as modular construction, climate-resilient infrastructure and advanced risk assessments, into project frameworks. For instance, incorporating climate adaptation strategies, such as flood-resistant designs or heat-tolerant materials, ensures projects remain viable under changing environmental conditions. By prioritising resilience in early planning stages, India can lower risks, reduce long-term capital costs, and deliver predictable financial outcomes, making projects more attractive to global investors.
Delhi-Mumbai Expressway – Aligning with
Global Sustainability Standards
A key example is the Delhi-Mumbai Expressway -
India’s longest expressway which has been designed
with solar-powered lighting, wildlife corridors,
and rainwater harvesting systems to ensure
environmental sustainability. These wildlife corridors,
have been constructed in ecologically sensitive
regions such as the Aravalli hills and the Sariska
Tiger Reserve, allowing for uninterrupted movement
of wildlife and reducing habitat fragmentation. The
rainwater harvesting structures are strategically
embedded to collect groundwater in drought-prone
zones, contributing to long-term water security. Solar
installations along the expressway reduce operational
emissions and promote energy self-sufficiency for
highway infrastructure. Together, these features
make the expressway a model for climate-resilient
design, aligning with global sustainability standards
and boosting investor confidence in India’s green
infrastructure ambitions.
Recommendation 2:
Prioritise Sustainability and Resilience to Attract Global Investment
2.
2.3 Strategic Implementation for Global Appeal
To operationalize these priorities, India should:
• Adopt International Standards: align project sustainability
metrics with globally accepted frameworks like the
SDGs to enhance credibility and access to global climate
finance.
• Incorporate Resilience in Design: use modular designs,
climate-adaptive strategies, and comprehensive risk
assessments to future-proof infrastructure.
• Build Capacity: invest in training for project developers
and procurement teams to ensure expertise in ESG
compliance and resilience planning.
• Engage Stakeholders Early: collaborate with international
investors during project conceptualization to align with
their ESG and resilience expectations.
By embedding sustainability and resilience into the core
of infrastructure projects, India can not only meet global
investor demands, but also unlock access to climate finance
and green investment opportunities. This strategic focus
will enhance project bankability, reduce financial risks, and
position India as a leader in delivering sustainable, future-
ready infrastructure on the global stage.
Image: Delhi-Mumbai Expressway – Aligning with
Global Sustainability Standards UK-India Infrastructure Financing Bridge - Year 1 Report
14 15 To make India’s infrastructure projects more appealing to
international investors, it is critical to address the perception
of opacity and unpredictability in construction and
operational risks. By improving transparency, standardising
risk-sharing frameworks, and providing clear government-
backed incentives, India can reduce risk premiums, enhance
project bankability, and attract competitive global capital.
3.1 Addressing Perceived Risks in Emerging Markets
In established markets, infrastructure risks are well-
understood, predictable, and priced accordingly. However,
in emerging markets like India, risks such as regulatory
changes, land ownership disputes, competition from other
assets, or the integration of unproven technologies are
often perceived as opaque or unpredictable, leading to
higher risk premiums.
International investors are comfortable pricing risks for
operating assets with established track records, such as
toll roads, but are deterred by uncertainties in greenfield
projects where complexities like construction challenges,
local partner reliability, and unproven revenue streams
converge.
The Working Group has identified that India’s Detailed
Project Report (DPR) process at times lacks comprehensive
risk articulation and mitigation strategies, which hinders the
private sector’s ability to accurately price risks.
The pricing of risk in such markets is driven by two
elements: the risk itself and the complexity surrounding
it. The compound effect of these factors is a market that
becomes increasingly complicated and less attractive to
international investors. To account for the elevated risks,
higher expected returns are required, which can ultimately
price international capital, including UK investors, out of the
market. This challenge is further compounded by the lower
cost of local capital – whether debt or equity – which often
makes international capital less competitive.
3.2 Enhancing the DPR for Risk Transparency
A robust DPR is pivotal to addressing investor concerns.
It needs to clearly articulate all potential risks across
the project lifecycle - strategic, regulatory, financial, and
operational - and outline how procuring authorities will
manage them. Key improvements include:
• Comprehensive Risk Identification: detail risks such
as regulatory shifts, land acquisition challenges, or
technological uncertainties, supported by historical data
or case studies where possible.
• Risk Management Strategies: specify mitigation
measures, including timelines, responsible parties, and
contingency plans.
• Standardized Risk Frameworks: develop consistent
methodologies for risk assessment and allocation
to reduce ambiguity and align with international
expectations.
By embedding these elements into the DPR process from
project inception, India can enhance transparency, enabling
investors to price risks accurately and reducing the need for
elevated returns that often price international capital out of
the market.
Recommendation 3:
Enhance Transparency and Consistency in Risk Management to Attract International Investment
3. UK-India Infrastructure Financing Bridge - Year 1 Report
16 17 The Hybrid Annuity Model (HAM) - Vadhavan Port Project
The Vadhvan Port Project in Palghar, Maharashtra,
is a major maritime infrastructure initiative utilizing
a modified Hybrid Annuity Model (HAM) for its $2.47
billion dredging, reclamation, and shore protection
works. The Jawaharlal Nehru Port Authority (JNPA) and
the Maharashtra Maritime Board (MMB) are developing
the port through Vadhvan Port Project Limited (VPPL)
under a public-private partnership (PPP) framework.
The total project cost is estimated at $9 billion, including
land acquisition and development of core infrastructure,
terminals, and commercial facilities.
Under the HAM, the government funds 60% of the
project cost ($1.48 billion) during the three-year
construction phase, with the remaining 40% ($0.99
billion) paid over a 5-7-year maintenance period
[differing from the NHAI’s 40:60 split over a longer term].
This structure reduces borrowing needs for JNPA and
MMB, with VPPL planning to raise $3.46 billion in long-
term debt (15-20 years) from onshore and offshore
markets. JNPA and MMB will jointly invest $1.5 billion (Rs
13,000 crore) in equity for Phase 1.
Thus, Vadhavan Port’s development under the Hybrid
Annuity Model (HAM) represents an ongoing effort to
establish a robust, long-term risk-sharing structure
between the public and private sectors.
3.3 Standardising Risk-Sharing and Incentives
To further enhance project bankability, India should
establish standardised risk-sharing frameworks and
government-backed guarantees, particularly for greenfield
projects. Infrastructure markets rarely operate on purely
commercial terms, and both developed and developing
economies commonly use incentives to secure investments.
India has already demonstrated success with innovative
tools like the Hybrid Annuity Model, Infrastructure
Investment Trusts (InvITs), and renewable energy offtake
guarantees. Expanding these mechanisms can address
investor concerns by:
• Mitigating Greenfield Risks: offer guarantees for
construction, regulatory, or revenue risks to reduce
uncertainty and improve financial predictability.
• Encouraging Long-Term Viability: use standardised
contracts and risk-sharing models to ensure fair
allocation of risks between public and private sectors,
fostering trust and collaboration.
3.4 Building Investor Confidence Through Transparency
Clear communication about risk ownership and
management throughout the project lifecycle is essential
to securing competitive pricing for international capital
and services. By proactively addressing investor concerns
through transparent DPRs, standardised frameworks, and
targeted guarantees, India can reduce perceived risks,
lower capital costs, and make its infrastructure market
more attractive. This approach will not only enhance the
bankability of projects but also position India as a leader
in delivering transparent, investor-friendly infrastructure
opportunities on the global stage.
$9bn
The total project cost is estimated at $9 billion UK-India Infrastructure Financing Bridge - Year 1 Report
18 19 To attract and retain international capital for India’s
infrastructure projects, it is critical to address investor
concerns about revenue security and ease of repatriation.
Key challenges include foreign exchange (FX) risks,
unpredictable tax environments, and the absence of
long-term financial mechanisms tailored to infrastructure
investments.
By implementing policies that protect returns and
streamline repatriation, India can enhance investor
confidence, reduce financial risks, and position itself as a
competitive destination for global capital. 4.1 Mitigating Foreign Exchange Risks
International investors consistently highlight FX risk as a
barrier, particularly due to the Indian rupee’s perceived
volatility and the lack of long-term hedging instruments
aligned with the 20+ year tenors typical of infrastructure
projects. While India’s FX market supports swaps for up
to seven years, longer-term hedging remains a challenge.
To address this, India could adopt mechanisms inspired
by other emerging markets, such as Mexico, which allow
investments in USD to reduce currency risk exposure. A
potential solution is the introduction of a currency risk pass-
through model, where the procuring authority assumes the
risks - and potential benefits - of currency fluctuations. This
approach would shield investors from FX volatility, making
projects more bankable and appealing to global financiers.
4.2 Addressing Taxation Barriers
Taxation policies, particularly withholding taxes on foreign
exchange lending from offshore entities (e.g., UK bank
branches or subsidiaries), place international capital at
a competitive disadvantage compared to local funding
sources. To encourage greater participation from offshore
investors, India should seek to implement policies to ensure
international companies’ participation on an equitable
basis. India could consider mitigation measures such as a
withholding tax exemption, subject to conditions, specifically
for infrastructure finance. This targeted policy would lower
the cost of capital for foreign investors, levelling the playing
field and incentivising increased investment in India’s
infrastructure sector.
Recommendation 4:
Safeguard Investor Returns Through Revenue Protection and Simplified Repatriation
4.
4.3 Policy Consistency and Government Guarantees
Investors seek assurance that policies supporting equitable
participation and revenue protection will remain stable
throughout a project’s lifecycle. The Indian government can
build trust by:
• Demonstrating Policy Commitment: clearly articulate
and enforce policies that ensure fair treatment of
international investors, with guarantees that these
measures will remain consistent over long-term project
durations.
• Offering Revenue Guarantees: provide government-
backed assurances to protect investor returns against
unforeseen regulatory or economic shifts, such as
changes in tax regimes or revenue streams.
• Facilitating Repatriation: streamline processes for
repatriating profits to reduce bureaucratic hurdles and
enhance investor confidence in accessing their returns. UK-India Infrastructure Financing Bridge - Year 1 Report
20 21 4.4 Strategic Benefits of Revenue Protection
By addressing FX risks, reforming taxation policies, and
ensuring policy stability, India can significantly enhance the
attractiveness of its infrastructure market. These measures
would:
• Lower Financial Risks: Reduce the cost of capital by
mitigating uncertainties related to currency fluctuations
and taxation.
• Attract Long-Term Investment: encourage participation
in capital-intensive, long-term projects by providing
predictable and secure returns.
• Enhance Global Competitiveness: position India as a
reliable and investor-friendly destination, competing
effectively with other emerging markets.
4.5 Implementation Roadmap
To operationalize these recommendations, India may
consider the following:
• Develop Currency Risk Mechanisms: pilot a currency risk
pass-through model for select infrastructure projects,
drawing on global best practices.
• Introduce mitigation measures including Tax Incentives:
enact withholding tax exemptions, with certain
conditions, for offshore infrastructure financing, with
clear eligibility criteria to ensure transparency.
• Strengthen Policy Frameworks: establish a dedicated
task force to ensure policy consistency and communicate
guarantees to investors through platforms like the
Detailed Project Report (DPR).
• Engage International Stakeholders: collaborate with
global investors and financial institutions to design
mechanisms that align with their risk tolerance and
return expectations.
By prioritising revenue protection and ease of repatriation,
India can unlock significant foreign capital inflows, support
sustainable infrastructure development, and solidify its
reputation as a trusted investment destination on the global
stage.
Climate and Energy Transition Finance Initiative (CETFI)
Japan’s Climate and Energy Transition Finance Initiative (CETFI) promotes currency risk mitigation to enhance investor confidence in climate-resilient infrastructure projects. By integrating robust financial and legal frameworks, CETFI stabilizes returns and facilitates cross-border investments. To mitigate currency risk, CETFI offers flexible investment options, allowing investors to use either local or foreign currencies, reducing exposure to exchange rate volatility. For foreign currency investments, CETFI collaborates with institutions like the Japan Bank for International Cooperation (JBIC) to provide hedging tools, such as currency swaps or forward contracts, and risk guarantees. These mechanisms shield investors from losses due to currency fluctuations.
CETFI further employs fixed or indexed payment models to ensure predictable revenue streams, minimizing financial uncertainty. Risk-sharing arrangements between public and private partners distribute currency and project risks, enhancing stability. Government-backed guarantees or support from multilateral institutions add another layer of security, making returns more reliable and easier to repatriate. By creating a transparent and predictable investment environment, CETFI encourages private sector participation in energy transition and climate-focused infrastructure, aligning with global sustainability goals. UK-India Infrastructure Financing Bridge - Year 1 Report
22 23 The UK-India Infrastructure Financing Bridge (UKIIFB)
has introduced a Project Assessment Framework (PAF)
tailored for Year 1 (Y1) deliberations in the highways and
rapid transit sectors (preliminary). Developed in close
collaboration with the Working Group, the PAF outlines
the minimum priorities and expectations of international
investors regarding project preparation and execution.
By providing a standardised, investor-centric tool, the PAF
enhances India’s ability to attract global capital, ensuring
projects are presented in a manner that aligns with
international standards and facilitates effective engagement
with investors. 5.1 Objectives of the PAF
The PAF is designed to serve as a concise, accurate, and
actionable summary of infrastructure projects, enabling
international investors to quickly evaluate opportunities.
It bridges the gap between India’s project development
processes and the expectations of global financiers by
presenting critical project details in a structured, globally
recognised format. Key objectives include:
Recommendation 5:
Utilise the Project Assessment Framework to Meet Global Investor Expectations
5.
Project Assessment Framework: Example Structure
Project
Overview
Market
Assessment
Pre-Feasibility
Assessment
Technical
Feasibility
Procurement
& Financing
Sector
Description of the project
Public/Private
Development
Development Status
Project Authority/Leader
Project Developer and
SPV
Broad sector strategy or
National Programme
Estimated Project Cost
Revenue Sources
Risk
Governance
Demand Assessment
Development
Considerations
Project Benefits
Project Risks
Other Declarations
Local Considerations
Other Declarations
Regulation
Legal
Development
Considerations
Investors and
Financing
Project financing
structure
Internal Rate of Return
Risk Allocation
Impact and Reporting
Design
Revenue
Considerations
Development
Considerations
Construction
Considerations
Operation
considerations
Investors and
Financing
Risk Allocation
Carbon Impact and
Reporting
Other Declarations
Government
Counterparty
Financial Analysis
Impact and Reporting
Other Declarations
Taxes
Legal
Revenue Considerations
Development
Considerations
Construction
considerations
Operation considerations
Investors and Financing
• Standardised Communication: ensures consistency
in how project information, such as scope, financial
structure, risk mitigation, and ESG compliance, is
presented to investors.
• Investor-Centric Design: highlights priorities like
revenue protection, regulatory stability, and long-term
resilience, addressing the core concerns of international
stakeholders.
• Facilitating Early Engagement: acts as a foundational tool
for initiating investor discussions, enabling procuring
authorities to build trust and momentum from the
outset. UK-India Infrastructure Financing Bridge - Year 1 Report
24 25 5.2 Strategic Importance for Attracting Investment
International investors often encounter challenges when
navigating India’s infrastructure market due to inconsistent
or incomplete project documentation. The PAF addresses
this by establishing a clear standard for information quality,
making it easier for investors to assess and compare
opportunities. By adopting the PAF, India can:
• Enhance Project Bankability: present projects in a way
that reduces perceived risks and aligns with global
investment criteria, increasing their appeal.
• Build Investor Trust: provide transparent, reliable
information that fosters confidence and encourages long-
term investment commitments.
• Streamline Decision-Making: enable investors to quickly
evaluate projects, accelerating the investment process
and reducing delays in project financing.
5.3 Integration with Project Development
To maximise its impact, the PAF maybe seamlessly
integrated into India’s project development lifecycle,
particularly within the Detailed Project Report (DPR) process.
Key implementation strategies include:
• Early-Stage Adoption: incorporate the PAF during project
conceptualisation to ensure investor priorities, such as
risk allocation and sustainability, are embedded from the
start.
• Collaboration with Stakeholders: work with the Working
Group, international investors, and financial institutions
to refine the PAF, ensuring it reflects evolving market
expectations and global best practices.
• Capacity Development: train procurement teams, project
developers, and policymakers on the effective use of the
PAF to ensure consistent application and high-quality
project documentation.
• Scalability Across Sectors: while initially focused on
highways and rapid transit, adapt the PAF for other
infrastructure sectors, such as energy or urban
development, to create a unified approach to investor
engagement.
5.4 Operationalizing the PAF
The PAF is not intended as a rigid or definitive tool but
rather as a flexible framework that sets a baseline for the
information required to attract international investment.
To operationalise it effectively:
• Customise for Project Needs: tailor the PAF to highlight
project-specific details while maintaining a standardised
structure for comparability.
• Iterate Based on Feedback: continuously refine the
PAF based on investor input and lessons learned from
initial project engagements to ensure relevance and
effectiveness.
• Promote Transparency: use the PAF to clearly articulate
risks, mitigation strategies, and financial projections,
addressing investor concerns about opacity in emerging
markets.
5.5 Long-Term Benefits
By institutionalising the PAF, India can transform its
infrastructure investment landscape. The framework will:
• Position India as a Global Leader: align project
preparation with international standards, making India a
competitive destination for infrastructure financing.
• Unlock Greater Capital Flows: attract a broader pool of
investors by reducing barriers to entry and enhancing
project credibility.
• Support Sustainable Development: ensure projects meet
global expectations for ESG compliance and resilience,
aligning with long-term economic and environmental
goals.
By leveraging the PAF as a cornerstone of its infrastructure
financing strategy, India can foster stronger partnerships
with international investors, streamline project execution,
and drive sustainable economic growth across critical
sectors. UK-India Infrastructure Financing Bridge - Year 1 Report
26 27 To secure substantial and sustained UK investment in India’s
infrastructure sector, India must prioritise building strong,
long-term relationships with leading global infrastructure
project sponsors, developers, and contractors, particularly
those based in the UK.
In global infrastructure markets, financing often follows
established sponsors into new markets, making strategic
engagement with these stakeholders critical for unlocking
capital flows. By fostering collaborative partnerships
through targeted outreach and sustained dialogue, India
can enhance its appeal as an investment destination and
drive competitive participation in its infrastructure market.
6.1 Importance of Engaging Project Sponsors
Project sponsors, developers, and contractors play a pivotal
role in shaping infrastructure markets, as their expertise,
track records, and networks attract financing from global
investors. UK-based sponsors, with their experience in
delivering high-quality, sustainable projects, are well-
positioned to partner with Indian counterparts to develop
bankable projects.
However, initial perceptions of India as a complex market
may lead to scepticism among UK sponsors. Overcoming
this requires proactive, consistent engagement to build
trust, raise awareness of India’s infrastructure opportunities,
and demonstrate a commitment to facilitating successful
collaborations.
6.
6.2 Strategies for Building Relationships
India can adopt a multifaceted approach to engage UK project sponsors effectively:
• High-Level Delegations: organize delegations to the
UK to meet with key industry players, including major
developers, contractors, and industry associations.
These visits should focus on exploring partnership
opportunities, understanding sponsor priorities, and
addressing concerns about market entry.
• Targeted Roadshows: host investment roadshows in
the UK to showcase India’s infrastructure pipeline,
highlighting projects tailored for international
participation, such as those using Public-Private
Partnerships or the Hybrid Annuity Model. These events
should emphasize India’s policy reforms, risk mitigation
strategies, and alignment with global ESG standards.
• Sustained Dialogue: establish ongoing communication
channels to maintain engagement with UK sponsors,
ensuring regular updates on market developments, policy
incentives, and project opportunities. This long-term
approach will help shift initial scepticism into genuine
interest and collaboration.
• UK-India Contractor Partnerships: facilitate the formation
of Global-India or UK-India consortia to compete in
India’s infrastructure market. These partnerships can
leverage UK expertise in project delivery and Indian
local knowledge to create competitive bids and enhance
project bankability.
Recommendation 6:
Foster Strategic Relationships with UK Project Sponsors to Attract Investment UK-India Infrastructure Financing Bridge - Year 1 Report
28 29 6.3 Leveraging UK Government Support
The UK government can play a pivotal role in fostering these
relationships by:
• Creating Collaborative Forums: establish platforms, such
as UK-India infrastructure summits or working groups,
to bring together Indian authorities and UK sponsors for
knowledge sharing and partnership development.
• Aligning with Existing Initiatives: integrate engagement
efforts with current UK-India corridor initiatives, such as
trade agreements or bilateral investment programs, to
amplify impact.
• Supporting Capacity Building: facilitate training and
knowledge exchange programs to build capacity on both
sides, enabling UK sponsors to navigate India’s market
and Indian stakeholders to meet global project delivery
standards.
6.4 Strategic Benefits
Building relationships with UK project sponsors offers
significant advantages:
• Attracting Financing: strong sponsor relationships will
draw UK and global investors, as financing often follows
reputable sponsors into new markets.
• Enhancing Project Credibility: partnerships with
established UK firms will signal project quality and
reliability, boosting investor confidence.
• Driving Innovation and Expertise: collaboration
with UK sponsors will bring advanced technologies,
sustainable practices, and global best practices to India’s
infrastructure sector.
• Strengthening Market Competitiveness: UK-India
partnerships will create competitive consortia capable
of delivering high-quality projects, positioning India as a
leader in global infrastructure markets.
6.5 Implementation Roadmap
To operationalize this recommendation, India should:
1. Identify Key UK Sponsors: map leading UK infrastructure
sponsors, developers, and contractors with expertise in
highways, rapid transit, or other priority sectors.
2. Plan Strategic Outreach: organize a series of high-level
delegations and roadshows in the UK, supported by
professional marketing consultants to ensure impactful
messaging.
3. Establish a Coordination Entity: create a dedicated
team within a relevant ministry or agency to manage
relationships with UK sponsors and coordinate
engagement efforts.
4. Leverage the PAF: use the UKIIFB’s Project Assessment
Framework (PAF) to present projects to UK sponsors in a
standardized, investor-friendly format.
5. Monitor Progress: track the outcomes of engagement
efforts, gathering feedback from UK sponsors to refine
strategies and address barriers. 6.6 Long-Term Impact
By prioritizing strategic relationships with UK project sponsors, India can transform its infrastructure investment landscape.
These partnerships will not only unlock significant capital
inflows but also foster knowledge transfer, enhance project
delivery standards, and build a robust track record of
successful international collaborations.
Over time, this approach will position India as a trusted and
competitive destination for global infrastructure investment,
driving sustainable economic growth and strengthening UK-
India bilateral ties.
Image: Houses of Parliament, London UK-India Infrastructure Financing Bridge - Year 1 Report
30 31 To bolster investor confidence and improve governance
in India’s infrastructure sector, leveraging Digital Public
Infrastructure (DPI) is critical. DPI offers a transformative
opportunity to address persistent challenges in
transparency, accountability, and efficiency across the
infrastructure project lifecycle.
By integrating digital tools into procurement, project
execution, and asset monetization, India can mitigate risks,
streamline processes, and align its infrastructure pipeline
with international investor expectations, thereby enhancing
its appeal as a global investment destination.
7.
7.1 Addressing Transparency Challenges
A significant barrier to attracting international investment is the perceived opacity in India’s infrastructure processes, particularly in auctioning, bidding, and supply chain management. These processes, often managed between Special Purpose Vehicles (SPVs) and local authorities, lack adequate digital oversight, leading to governance gaps, especially with tier 1 and tier 2 suppliers, including subcontractors handling labour, vehicles, and materials. This opacity increases risks, erodes investor trust, and complicates project delivery. Mandating DPI for projects exceeding a threshold—such as US$10 million—can enhance transparency by:
• Digitising Procurement and Bidding: implementation
of digital platforms to ensure open, competitive, and
auditable bidding processes, reducing instances of
favouritism and irregularities.
• Real-Time Oversight: this can be achieved through use
of project tracking dashboards to monitor construction
progress, subcontractor performance, and compliance
with contractual obligations.
• Supply Chain Accountability: integration of digital tools
to track supplier and subcontractor activities, ensuring
transparency and mitigating risks associated with labour
and material procurement.
Recommendation 7:
Enhance Project Transparency and Governance Through Digital Public Infrastructure UK-India Infrastructure Financing Bridge - Year 1 Report
32 33 7.2 Strengthening NIP and NMP Through DPI
India’s National Infrastructure Pipeline (NIP), targeting
US$1.5 trillion by 2025, and National Monetisation
Pipeline (NMP), aiming to monetize US$75 billion in public
assets, have laid a strong foundation for infrastructure
development and asset optimization. These initiatives
have introduced some level of digital transparency by
showcasing project pipelines online, attracting private sector
participation, and supporting economic growth. However,
challenges persist in bidding transparency, project execution
oversight, and post-monetization monitoring. Strengthening
these initiatives with DPI can address these gaps and align
them with international investor expectations:
• Digital Procurement Systems: introduce automated
procurement platforms for NIP projects to ensure fair
competition, reduce inefficiencies, and provide auditable
records.
• Real-Time Performance Monitoring: deploy dashboards
for NMP assets to track performance metrics, ensuring
effective management and investor confidence in
monetized assets.
• Prioritization and Ringfencing: curate a subset of high-
potential projects within the NIP and NMP, using DPI
to present prioritized opportunities in a clear, investor-
friendly format to navigate the daunting scale of India’s
pipeline.
7.3 Strategic Benefits of DPI Integration
Integrating DPI into infrastructure projects offers multiple
advantages:
• Enhanced Investor Confidence: transparent, digital
processes reduce perceived risks, making projects more
attractive to international investors seeking accountability
and governance.
• Improved Efficiency: automated systems streamline
complex processes like bidding, contract management,
and payments, reducing delays and costs.
• Risk Mitigation: real-time tracking and auditable records
minimize governance gaps, fraud, and mismanagement,
particularly in subcontractor ecosystems.
• Alignment with Global Standards: DPI adoption signals
India’s commitment to modern, transparent practices,
aligning with investor expectations for ESG compliance
and operational excellence.
Enhancing transparency and governance
through Digital Public Infrastructure (DPI):
India’s use of Digital Public Infrastructure (DPI) in
major infrastructure projects has notably improved
transparency, efficiency, and investor confidence.
The National Highways Authority of India’s Online
Contract Management System (OCMS) digitizes the
entire project cycle, allowing real-time tracking and
ensuring fair competition in procurement. Similarly,
the Eastern Dedicated Freight Corridor (EDFC), led
by Dedicated Freight corridor corporation of India
limited (DFCCIL) under the Ministry of Railways,
uses digital tools like integrated project monitoring
and automated control centres to smoothen land
acquisition and freight operations. These digital
systems minimize regulatory opaqueness and
execution delays, creating a more predictable and
investor-friendly environment.
7.4 Implementation Roadmap
To effectively leverage DPI, India should:
1. Mandate DPI for Large Projects: require digital tools for
projects above US$10 million, integrating platforms for
procurement, tracking, and supply chain management.
2. Enhance NIP and NMP Platforms: upgrade existing digital
interfaces for NIP and NMP to include real-time data,
investor-friendly dashboards, and prioritized project lists.
3. Engage Technology Partners: collaborate with global
technology providers to develop secure, scalable DPI
solutions tailored to infrastructure needs.
4. Build Capacity: train procurement teams and local
authorities on DPI tools to ensure effective adoption and
consistent implementation.
5. Pilot and Scale: launch pilot projects using DPI in select
NIP and NMP initiatives, refining tools based on feedback
before scaling nationwide.
7.5 Long-Term Impact
By embedding DPI into its infrastructure ecosystem, India
can transform its project delivery and asset monetization
processes. This approach will not only address governance
and transparency challenges but also position India
as a leader in leveraging technology for sustainable
infrastructure development.
A transparent, digitally enabled pipeline will attract global
capital, maximize the impact of NIP and NMP initiatives,
and drive long-term economic growth, cementing India’s
reputation as a reliable and forward-thinking investment
destination. UK-India Infrastructure Financing Bridge - Year 1 Report
34 35 International stakeholders perceive India’s infrastructure
sector to be dominated by a few large Engineering,
Procurement, and Construction (EPC) firms and financial
institutions, whose deep local expertise and economies
of scale limit opportunities for mid-tier construction
companies. This market concentration stifles the growth of
a diverse, innovative ecosystem, reducing the sector’s global
competitiveness and deterring international firms, who
struggle to find reliable local partners for effective project
delivery. To address this, India must adopt bold strategies to
nurture mid-tier firms, fostering a vibrant, inclusive market
that attracts global capital and enhances project execution.
8.1 Challenges of Market Concentration
Dominant EPC firms leverage their extensive networks,
regulatory familiarity, and cost advantages to secure major
projects, marginalizing mid-tier firms. This results in:
• Limited Growth Opportunities: mid-tier firms lack access
to high-value projects, hindering their ability to build
capacity or credibility.
• Innovation Barriers: concentration discourages adoption
of new technologies and sustainable practices, as
dominant firms prioritize cost over innovation.
• Shallow Market Depth: the absence of a robust mid-tier
ecosystem limits the sector’s ability to scale or adapt to
diverse project needs.
8.2 Impact on International Participation
International firms, bringing global expertise and capital,
rely on credible mid-tier partners to navigate India’s
complex market. The scarcity of such firms creates:
• Partnership Challenges: without experienced mid-tier
companies, international firms struggle to form reliable
alliances for efficient project execution.
• Elevated Risks: dependence on untested smaller entities
increases risks of delays, quality issues, or regulatory
non-compliance.
• Reduced Investor Confidence: uncertainty about
partnerships discourages international firms from
investing in bids or market entry.
8.3 Importance of a Mid-Tier Ecosystem
A thriving mid-tier ecosystem is vital for:
• Driving Competitiveness: mid-tier firms foster innovation,
specialization, and alignment with global Environmental,
Social, and Governance (ESG) standards.
• Enhancing Scalability: a diverse ecosystem supports
a wide range of projects, aligning with the National
Infrastructure Pipeline (NIP) ambitions.
• Attracting Global Capital: reliable mid-tier partners give
international firms confidence to invest, combining global
expertise with local capabilities.
8.
8.4 Strategies to Build a Mid-Tier Ecosystem
India can foster mid-tier growth through:
• Capacity Building: offer training programs to enhance
technical, financial, and governance skills, enabling mid-
tier firms to meet global standards.
• Project Allocation: reserve NIP projects for mid-tier firms
or consortia to build experience and credibility.
• Partnership Incentives: provide tax breaks or streamlined
approvals to encourage collaborations between
international and mid-tier firms.
• Digital Connectivity: use Digital Public Infrastructure (DPI)
to create platforms connecting mid-tier firms with global
players, enhancing visibility.
• Mentorship Programs: facilitate knowledge transfer from
dominant EPC firms or international partners to mid-tier
companies, sharing best practices.
8.5 Long-Term Benefits
By nurturing mid-tier firms, India can:
• Diversify the Market: reduce dependence on dominant
players, fostering innovation and resilience.
• Boost Investor tust: Provide reliable partners, lowering
entry barriers for international firms.
• Promote Sustainable Growth: align mid-tier firms with
ESG and climate-resilient goals, enhancing project appeal.
This strategic focus will deepen India’s infrastructure market,
attract global investment, and establish the country as a
competitive, inclusive leader in sustainable infrastructure
development.
Recommendation 8:
Foster a Competitive Infrastructure Ecosystem by Supporting Mid-Tier Firms
Image: Ambala to Kotputli Axis Control Corridor UK-India Infrastructure Financing Bridge - Year 1 Report
36 37 In addition to the eight
recommendations outlined above,
India may wish to consider how it can
continue to strengthen its investment
environment and international
competitiveness.
Further Considerations for Enhancing
India’s Investment Landscape
As India builds on the momentum of its infrastructure
ambitions, there are valuable lessons to draw from the
UK’s evolving approach to attracting investment, as well
as strategies employed by other jurisdictions that have
successfully positioned themselves as global investment
destinations. The following areas highlight opportunities for
deeper reflection and future action:
1. Strengthening Market Engagement to Build Investor
Confidence
While India has made significant strides in improving its
ease of doing business and institutional capacity, investor
perceptions of risk and complexity remain a barrier.
International investors continue to view India as a high-
potential but challenging market, particularly for greenfield
infrastructure projects with limited precedent for private-
sector delivery.
There is scope for India to further develop a structured and
sustained market engagement strategy. This could involve:
• Ongoing dialogue with global investors to showcase
opportunities, policy reforms, and risk mitigation
mechanisms;
• Professionalising the marketing of India’s infrastructure
pipeline, including through tailored investor
communications and transparent project packaging;
• Drawing from global examples—such as the UAE and
Southeast Asian markets—where consistent, targeted
outreach has successfully built investor trust and visibility
over time.
Proactive engagement, anchored in transparency and
consistency, can help shift perceptions and signal India’s
commitment to being a long-term, investor-friendly market.
2. Curating a Cohesive and Investible Project Pipeline
India’s infrastructure pipeline is vast, but its complexity can deter international capital. Investors often struggle to identify projects that align with their risk appetite, ESG priorities, or financing models. To address this, India could consider enhancing the structure and presentation of its pipeline to better align with global investor expectations.
Key considerations include:
• Prioritising and packaging projects that are most suitable
for international investment, particularly those with clear
risk-sharing models and predictable revenue streams;
• Leveraging familiar frameworks, such as PPPs, InvITs, and
the Hybrid Annuity Model, to enhance project bankability;
• Using standardised tools like the UK-India Infrastructure
Financing Bridge’s Project Assessment Framework (PAF)
to ensure clarity and comparability.
A curated and clearly communicated pipeline not only
increases investor confidence but also facilitates repeat
investment and long-term engagement.
3. Enhancing Investor Navigation and Market Access
India could further improve the investor experience by
providing streamlined access to information, guidance,
and credible local partnerships. A “concierge” approach—
common in leading investment promotion agencies—could
support this goal. Such a function would:
• Act as a central point of contact for international
investors;
• Offer tailored guidance on project opportunities, local
regulations, and partnership development;
• Provide transparency and consistency in communications
with prospective investors.
This kind of investor-facing infrastructure is increasingly
seen as a competitive differentiator among emerging
markets.
India’s National Infrastructure Pipeline:
India has introduced the National Infrastructure Pipeline (NIP) and the Climate Resilient Cities initiative in part to offer investors a consolidated view of the Indian infrastructure market. NIP is a government initiative focused on boosting infrastructure development across various sectors. It’s a comprehensive investment plan spanning from 2019 to 2025, aiming to improve infrastructure access and promote inclusive growth. The NIP includes both greenfield and brownfield projects with a total projected capital expenditure of ₹111 trillion.
The Department of Economic Affairs (DEA) led a task force in developing the NIP. The NIP includes a monitoring mechanism to track progress and address potential delays. These types of consolidated initiatives are being increasingly used by jurisdictions, to plan major projects and present them to investors. In Brazil, the Ministry of Infrastructure and the National Land Transport Agency (ANTT) in Brazil serves as a knowledge centre which has and builds expertise and can ensure that all the appropriate steps are taken in developing infrastructure projects and facilitating PPP activities. Some of these bodies also provide a communication channel to investors, helping bidders and financiers with information and opportunities, as well as providing contract management after financial close. UK-India Infrastructure Financing Bridge - Year 1 Report
38 39 By continuing to refine its investor engagement and
project preparation efforts, India has the opportunity
to position itself as a leader in global infrastructure
investment. Drawing from the UK’s project finance
expertise, and learning from the strategies of other
successful jurisdictions, India can further unlock
capital, build trust, and drive sustainable growth.
Looking Ahead UK-India Infrastructure Financing Bridge - Year 1 Report
40 41 The United Kingdom-India Infrastructure Financing Bridge (UKIIFB)
is a collaboration between the City of London Corporation and the
National Institution for Transforming India (NITI Aayog).
About NITI Aayog and City of London Corporation
National Institution for Transforming India
The National Institution for Transforming India (NITI
Aayog) is the premier policy think tank of the Government
of India. Formed via a resolution of the Union Cabinet
on 1 January 2015, NITI Aayog provides technical and
policy inputs towards development of long-term policies
and programmes of the Government of India, State
Governments and Union Territories. The Governing
Council of NITI Aayog is chaired by the Prime Minister,
and comprises Chief Ministers of all the States and Union
Territories with legislatures and Lt Governors of other Union
Territories as members.
Appendix - Report Context
City of London Corporation
The City of London Corporation (CoLC) is the governing body for London’s main financial district, the Square Mile. The CoLC promotes the UK as a leading global hub for financial and professional services (FPS). As a trusted convener, it connects firms with governments and regulators, engaging on policy and regulation while championing trade and investment. A key part of its work is engaging with UK and international policymakers to help remove trade and investment barriers and enable FPS firms to do more business across borders. CoLC is committed to a thriving, sustainable City that supports a globally successful UK.
The UKIIFB aims to:
• Accelerate the mobilisation of international private sector
investment into Indian sustainable infrastructure
• Develop best practices and share sector knowledge
on sustainable infrastructure projects and how these
can be better positioned as investible and attractive to
international investors
• Deliver structured recommendation for demonstrator
projects, focusing on sustainable infrastructure
development
The initiative leverages the UK’s expertise in designing,
structuring and phasing major projects to unlock
sustainable infrastructure investment into India from
international investors. The UKIIFB was announced at the
12th Economic and Financial Dialogue between the UK and
India which took place New Delhi in September 2023. Work
began in February 2024 and the official launch took place in
London on 4th September 2024. The initiative is to run for 2
years, completing its work in 2026. This report is the first of
two instalments.
The UKIIFB is led by its Honorary Co-Chairs; Chris Hayward,
Policy Chairman of the City of London Corporation, and BVR
Subrahmanyam, CEO of NITI Aayog.
The work in the UK has been led from the Innovation and
Growth Department at the City of London Corporation led
by Simi Shah, Director, alongside Meenu Niranjan based
in London and James Hannah based in Mumbai. The work
in India has been led by Sanjeet Singh, Senior Advisor at
NITI Aayog, alongside CPS Reddy, Advisor with support
from Muskan Agarwal and Devyanshi Didwania – Young
Professional, NITI Aayog, in New Delhi. The knowledge
partner is 3B Impact, an independent consultancy based
in the UK. 3B Impact’s work on this programme is led by
John Kjorstad and Kay Scott, subject-matter experts with
more than twenty years of experience in global energy and
infrastructure development and finance. UK-India Infrastructure Financing Bridge - Year 1 Report
42 43 The work in the UK is steered by individuals from HM
Treasury, Aon, Arup, Mott MacDonald, Clifford Chance and
Sequoia Investment Management Company. The work in
India is represented by individuals from Department of
Economic Affairs, Larsen & Toubro, Sorin Investment Fund,
Economic Laws Practice and AECOM India Private Limited.
Together they form the UKIIFB Working Group and a full list
of members follows below.
The UKIIFB has benefitted throughout its operation from
the consistent and proactive support of both the High
Commission of India in the UK and the High Commission of
the UK in India. We would like to acknowledge and thank
both organisations for their ongoing commitment. Honorary Co- Chairs
•Chris Hayward, Policy Chairman, City of London
Corporation
•B.V.R Subrahmanyam, CEO, NITI Aayog
Working Group Co-chairs
•Sanjeet Singh, Senior Adviser, Trade & Commerce,
Economic & Finance, Disinvestment, International
Cooperation & G-20 Co-ordination, NITI Aayog
•Simi Shah, Director, Innovation and Growth, City of
London Corporation
•UK Working Group Member Representation
•Simon Harris - Managing Director, International
Development Services Unit, Mott MacDonald.
•Sowmya Parthasarathy - Director, Urban Design and
Master planning, Arup
•Mark Courtneidge - Client Director, Aon
•Jenny Young - Deputy Director, His Majesty’s Treasury
(HMT)
•Sohini Kar-Purkayastha - Project Finance Counsel, Clifford
Chance LLP
•Anurag Gupta - Chief Risk Officer, Sequoia Investment
Management
•Indian Working Group Member Representation
•Baldeo Purushartha - Joint Secretary, Department of
Economic Affairs, Ministry of Finance
•Anmol R Soni, Executive Vice President & Head, Corporate
Affairs, Larsen & Toubro
•Sanjay Nayar - Founder & Chairman, Sorin Investment
Fund
•Sanjay Notani - Partner, Economic Laws Practise
•Dinesh Arora - Tech Director, AECOM India Private Limited
•P S Reddy - Advisor, NITI Aayog
Additional support has been given from Clifford Chance
from Nandini Das, Project Finance Lawyer and Adrian
Cartwright, Global Senior Partner.
The India Working Group visited London twice in the first
year and the UK side travelled to Mumbai and Delhi in
November 2024. Together, the Working Group has created
Project Assessment Frameworks – one template each for
the identified sectors of interest rapid transit and highways
– and reviewed demonstrator projects against these
frameworks. These reviews gave rise to both the asset level
feedback and has prompted the wider recommendations
included in this report.
An executive summary emphasises the key points
and recommendations taken from the first full year of
programme work.
The body of the report details the insights shared between
UK and Indian counterparts and translates the discussions
under the UKIIFB around interventions to increase the
flows of international capital and professional services to
sustainable infrastructure projects in India.
The report also references the results of 3B Impact’s
research conducted in June 2024, which set out to better
understand current international investor and lender
perspectives on the wider Indian infrastructure market
and the sectors of interest. This research has been used
as a high-level view to frame wider project discussions
and inform the recommendations in this report. Where
appropriate it references the relevance of comparative
market case studies from other high markets. UK-India Infrastructure Financing Bridge - Year 1 Report
44 45
About the Global City campaign: About the City of London Corporation:
The Global City campaign is the City of London Corporation’s
overarching initiative to promote the UK as a world-leading
international financial centre. It showcases the UK as a great
place for financial and professional services firms to invest,
locate and grow.
The City of London Corporation is the governing body of
the Square Mile dedicated to a vibrant and thriving City,
supporting a diverse and sustainable London within a
globally successful UK.
We aim to:
www.theglobalcity.uk
Contribute to a flourishing society
Support a thriving economy
Shape outstanding environments
By strengthening the connections, capacity and character of
the City, London and the UK for the benefit of people who
live, work and visit here.
www.cityofondon.gov.uk