Sept. 14 (Bloomberg) -- Citigroup Inc., partnering Blackstone Group LP in an infrastructure fund in India, expects to raise $1 billion to build roads, ports and utilities by next month, after a delay in setting up the fund.

``We are in the process of raising it,'' Sanjay Nayar, the chief executive officer for the bank's Indian unit, said in an interview in Mumbai today.

Chief Executive Officer Charles Prince had said the New- York based bank, Blackstone and Infrastructure Development Finance Co. will raise $5 billion to invest in India by last May. India plans to spend $475 billion by 2012 to ease bottlenecks constraining growth, attracting investors including 3i Group Plc.

The partners in February agreed to invest $250 million each for projects in India, the world's fastest-growing major economy after China. Infrastructure Development Finance in July raised $519 million selling shares to fund projects.

Prime Minister Manmohan Singh in October doubled his infrastructure budget, saying upgrading public facilities is crucial to meeting a target of raising growth to 10 percent from an average of about 8 percent.

The nation loses 2 percentage points of annual growth because of inadequate power and transportation networks, according to the finance ministry. India produces about 8 percent less electricity than it needs, cutting gross domestic product by a 10th, the ministry estimates.

3i Group, Europe's biggest publicly traded buyout and venture capital firm, plans to raise $5 billion for a fund to invest in Indian ports, power plants and roads, two people with knowledge of the plan said in July. Last month, Blackstone Group LP invested $150 million in Nagarjuna Construction Co.

To contact the reporter on this story: M.C. Govardhana Rangan in Mumbai at grangan@bloomberg.net.

Last Updated: September 14, 2007 09:12 EDT