Back in May, I reported that Venezuela wanted to partner with India in a $100 billion SWF to jointly acquire energy assets in Latin America. It was an audacious idea on the part of the Chavez, which, oddly enough, India actually took pretty seriously:
“‘India has asked for a draft of the proposal. It will be discussed with concerned ministries and companies dealing in energy sector,’ said an external affairs ministry official, requesting anonymity.”
Unfortunately for those hoping to see the world’s first overtly strategic bi-lateral SWF, there’s news out this morning that India has formally rejected Venezuela’s offer. It was fun while it lasted.
Why did India take a pass on this opportunity? Not for the reasons you are probably thinking. Here’s the same “external affairs ministry official” from before:
“Given the political risks in Venezuela, it will be advisable to take a consortium financing and energy assets development with China and Russian firms to spread political risks…”
So, if I’m reading this correctly, India has decided to press ahead with strategic energy investing in Latin America, but it just views Russia and China as more reliable business partners than Venezuela. I’ll let you noodle on that one for a while…