Kerala to create SPV to tap diaspora investments

Thiruvananthapuram, Jan 21 ( IANS) In a first of its kind, the Kerala government has decided to come up with a special purpose vehicle (SPV) to tap the investments of Kerala diaspora, an official said Wednesday.

Speaking to IANS, P. Sudeep, chief executive officer of Norka-Roots, said this idea was mooted and took the initial shape at the recently concluded NRK Global Meet at Kochi last week.

Norka-Roots is a government agency which looks after the welfare of the nearly 2.5 million non-resident Keralites.

"This new thought first took shape at the Pravasi Bharathiya Divas held in Gandhinagar, earlier this month, when our officials made a presentation inviting the Indian diaspora to invest in mega projects in our state," Sudeep said.

"From there, the discussions started and it took a proper shape at our NRK meet when the participants were vociferous that they are willing to contribute, provided they get a fair and reasonable return. Then the thought of the SPV took shape and in principle it was agreed. Now officials are looking into the operational part of launching a SPV," he said.

The most recent study conducted by K.C. Zachariah and S. Irudayarajan of the Centre for Development Studies revealed that the number of Kerala emigrants as of 2014 was 23.63 lakh, with 90 percent residing in the various Middle East countries.

Latest report indicates that foreign remittances to Kerala have crossed Rs.72,000 crore in the 2013-14 fiscal.

Taking this into consideration, the Kerala officials at the Kochi meet showcased three major government projects - Kochi Metro Rail Limited (KMRL), Kannur International Airport (both these projects are expected to be inaugurated this year), and Startup Village, which is already going steady - for the non-resident Keralites to make investments in.

"The whole idea behind creating this SPV is to enable Kerala diaspora contribute to this and the money that comes into it can be directed towards funding these three major projects and others which are in the pipeline. In turn, they will also get a reasonable return," added Sudeep.

One reason the Kerala officials are confident of ensuring good returns on the NRK investments is the popular PPP model that was adopted for the first time in building the Cochin International Airport.

Since the airport has become operational, all those who invested have so far recovered 132 percent of their investment, officials noted.