Fertiliser Ministry proposes $1-b sovereign wealth fund

PTI New Delhi | Updated on April 26, 2012

Amid depleting resources and rising global prices of soil nutrients, the Fertiliser Ministry has proposed a $1-billion Sovereign Wealth Fund to acquire such assets abroad.

“We have proposed to the Finance Ministry about creating a SWF of $1 billion for acquiring of fertiliser mineral assets in foreign countries,” a source in the Fertiliser Ministry said.

The broad modalities about the nature of operation of the fund still need to be discussed, the source added.

India imports about 6 million tonnes of potash and urea and 7 mt of Di-ammonium Phosphate (DAP) every year.

According to another source in the Ministry, the nature of operation of the fund needs to be discussed in detail as there are some grey areas.

“We need to sort out whether it will be used for resource gap funding in case a private company is looking to acquire assets in a foreign country or to help public sector firms in acquiring assets,” he said.

PPP model

Various committees and working groups have suggested the public private partnership (PPP) model for acquisition of assets, in which case the modalities of the fund will have to be cleared about the level of financial support for both public and private sector, the source added.

Recently, the Working Group on Fertilisers, set up by the Planning Commission for the 12th Five-Year Plan (2012-17), had suggested that India should look at buying fertiliser mineral assets in over 20 countries including Belarus and Canada to meet the domestic shortfall.

It had also recommended that in view of the risk and huge costs involved in acquisitions, the Government should create a fund with an initial corpus of $5 billion.

Published on April 26, 2012

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