Gulf Finance plans business zones in Mumbai

Mumbai: Gulf Finance House, a Bahrain-based Islamic investment bank, has announced that it would be investing $10 billion over the next five years to build exclusive business zones near the proposed airport in Navi Mumbai.

The zones would be developed on the lines of media city in Dubai and energy city of Qatar. The bank has acquired 1,600 acres of land and signed an MoU with the Maharashtra Government on Friday.

The plan is to develop four exclusive zones for sectors such as energy, telecommunications, software and entertainment with offices, residential complexes, roads and all other infrastructure facilities, said Mr Esam Janahi, Chairman of Gulf Finance House, at a press conference.

Pvt placement

He said the bank had already raised $630 million in a private placement for the first phase of construction. The balance funds would be raised through equity and debt. The zones are expected to generate three lakh jobs

The agreement signed with the State government is a follow-up on an earlier MoU signed on October 5, 2006. The earlier MoU was only for a 300-acre exclusive energy zone with $2 billion investment.

Mr Peter Panayiotou, Acting CEO of Gulf Finance House, said that $10 billion would be raised from 3,000 high net worth individuals and financial institutions in the countries of Gulf Cooperation Council. An initial spend of $650 million would be purely for infrastructure in the energy zone. About $400 million would be spent on the software and telecom zones while the cost of entertainment zones is yet to be determined. About five years would be required for setting up the zones. By January 2008, about $ 1.2 billion would be raised for the zones. It will have 30:70 debt equity ratio, he said.

Tapping client base

Mr Panayiotou added that once the master plan for the zones are ready, the bank would approach Indian developers for further developing the areas. Though the funds for the project would be raised largely from the bank’s client base overseas, the bank may consider raising funds from India also, he said.

The bank was established in Kingdom of Bahrain in 1999. During its eight years of operations, it has successfully launched or participated in several infrastructure development projects with an aggregate estimated development value exceeding $12 billion and placed with its clients an aggregate value of equity investment of approximately $3 billion.