KUWAIT: Kuwait's sovereign wealth fund is teaming up with group of investors to target failing power assets in India. The Kuwait Investment Authority, along with Canadian pension fund, Caisse de depot et placement du Quebec, the State General Reserve Fund of Oman, Tata Power and ICIC Venture will create a joint venture funded specifically with the aim of buying up troubled power assets.

The KIA, along with the Canadian and Omani funds will invest around $650 million of equity to create a dedicated pool of $850 million, the Economic Times of India reported yesterday. The joint venture will eventually amass a pool of a reported $4 billion to $5 billion to use to buyout financially troubled power assets. A formal announcement is expected by end February.

KIA investments are seldom made public. In a February note, Standard and Poor's said that "Kuwait had increased its annual contributions to the RFFG from 10 percent to 25 percent of total revenues in the last two fiscal years including in fiscal 2014/15, because higher oil prices had produced very strong revenues. Now that oil prices are sharply lower, transfers to the fund from 2015/16 onward have reverted back to 10 percent. The fund will still continue to grow on reinvested earnings and the continued, albeit lower, contributions. Disclosure about the size and structure of the fund and KIA's assets is limited but we estimate them at about $535 billion at end-2015."

By Sarah Ahmed