India's Tata Group in $2bn road JV with Actis-report

MUMBAI, April 29 (Reuters) - India's Tata Group is forming a joint venture with private equity firm Actis that could invest about $2 billion over five years in building roads, The Economic Times newspaper said on Thursday.

Unlisted Tata Realty & Infrastructure, a company set up to construct roads and highways, will own 65 percent of the joint venture TRIL Roads Pvt Ltd and Actis will own the remainder, the report said quoting Tata Realty's Managing Director and Chief Executive Sanjay Ubale.

Actis will pay $77.5 million to buy the stake in TRIL Roads and Tata Realty will invest $122.5 million in the venture, the report said.

For Actis, which manages a $750-million infrastructure fund, this is the first investment in Indian infrastructure sector, the report said quoting the private equity firm's partner Michael Till.

Italy's biggest toll operator Atlantia, which is a technical partner of Tata Realty, has agreed to invest $200 million to pick up a stake in special purpose vehicles to be floated for setting up the projects, the paper cited Ubale as saying.

About $300 million will be available from the Indian government as viability gap funding and the remaining $1.3 billion will be raised from financial institutions, the report said.

Viability gap funding is the money put in by the state to close the gap between the cost of an infrastructure project and the money private investors are willing to spend. (Writing by Janaki Krishnan; editing by Malini Menon)