ABU DHABI (Reuters) - Qatar Holding, a subsidiary of sovereign wealth fund Qatar Investment Authority, plans to invest $250 million in an affordable housing fund run by India’s ArthVeda Fund Management, the Indian firm said on Monday.
The decision follows the Indian government’s release of a state budget last week which grants infrastructure status to affordable housing. This could give developers access to financing at lower interest rates as well as tax exemptions.
Qatar Holding will provide all the money in the $250 million fund, which will invest across cities in India and aim for an internal rate of return of at least 18 percent, ArthVeda said. Representatives of QIA did not immediately respond to an email and a telephone call seeking comment.
India needs to build 19 million urban housing units in the low and mid-income category by 2022, requiring capital of $1 trillion, ArthVeda estimated.
The fund management firm is part of Wadhawan Global Capital, a financial services conglomerate; another group member, Dewan Housing Finance Corp, has lent over $25 billion to the affordable housing sector, the statement said.
Reporting by Stanley Carvalho; Editing by Andrew Torchia/Keith Weir