FinMin in talks with investors to set up strategic investment fund under NIIF

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The Finance Ministry is planning to set up a fund under the National Investment and Infrastructure Fund (NIIF) dedicated for strategic investments. Earlier this year, NIIF had kickstarted its funding activity with the global operator of marine and inland terminals, DP World, by creating a platform for investing up to $3 billion in ports and logistics.

“We are now discussing a fund in NIIF which is more for the strategic investment,” a top finance ministry official told PTI.

When asked about by when the fund would come into existence, the official said, discussions with investors are at advanced stage and it should be operational soon. NIIF plans to raise Rs 8,000 crore from various sources to fund projects worth Rs 16,000 crore for the current fiscal.

The government has allocated Rs 1,000 crore budgetary support to NIIF which will be leveraged to raise Rs 8,000 crore from strategic anchor partners, namely multilateral and bilateral institutions, sovereign wealth funds, pension funds and domestic public sector enterprises, the official said.

It is to be noted that the first close of the NIIF Master Fund took place on October, 16, 2017 with contributions from a subsidiary of Abu Dhabi Investment Authority and four domestic institutional investors – HDFC Group, ICICI Bank, Kotak Mahindra Life and Axis Bank.

An India-UK Green Growth Equity Fund (GGEF) is also being set up under the fund of funds vertical of NIIF, and will have anchor commitments of £120 million each from the Government of India (through NIIF) and the Government of UK.

NIIF is being operationalised by establishing three Alternative Investment Funds (AIFs) under the SEBI Regulations. The proposed corpus of NIIF is Rs 40,000 crore (around $6 billion). The Government of India’s contribution to the AIFs under the NIIF scheme will be 49 per cent of the total commitment.

NIIF has the mandate to solicit equity participation from strategic anchor partners like overseas sovereign/quasi-sovereign/multilateral /bilateral investors.