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National Investment and Infrastructure Fund (NIIF)

Topics Covered: Infrastructure.

National Investment and Infrastructure Fund (NIIF):


Context:

Canada’s PSP, US’ DFC, Axis Bank invest $107 million in NIIF’s master fund.

  • After the new commitment from the three investors, the overall size of the ‘master fund’ has touched USD 2.34 billion.

About NIIF:

The government had set up the ₹40,000 crore NIIF in 2015 as an investment vehicle for funding commercially viable greenfield, brownfield and stalled infrastructure projects.

  • NIIF’s mandate includes investing in areas such as energy, transportation, housing, water, waste management and other infrastructure-related sectors in India.
  • NIIF currently manages three funds each with its distinctive investment mandate. The funds are registered as Alternative Investment Fund (AIF) with the Securities and Exchange Board of India (SEBI).

NIIF Investors:

  • The NIIF signed the first investment deal of worth USD 1 billion with the Abu Dhabi Investment Authority (ADIA) in October 2017. The ADIA became the first-ever international investor in the NIIF’s master fund.
  • The Indian Government holds a 49% share in the NIIF. Domestic investors such as ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Life are the other notable investors in the NIIF.
  • The Asian Infrastructure Investment Bank in June 2018 announced to invest USD 200 million.

The three funds are:

  1. Master Fund: Is an infrastructure fund with the objective of primarily investing in operating assets in the core infrastructure sectors such as roads, ports, airports, power etc.
  2. Fund of Funds: Managed by fund managers who have good track records in infrastructure and associated sectors in India. Some of the sectors of focus include Green Infrastructure, Mid-Income & Affordable Housing, Infrastructure services and allied sectors.
  3. Strategic Investment Fund: Is registered as an Alternative Investment Fund II under SEBI in India. The objective is to invest largely in equity and equity-linked instruments. It will focus on green field and brown field investments in the core infrastructure sectors.

InstaLinks:

Prelims Link:

  1. About NIIF.
  2. Different funds under NIIF.
  3. Who manages NIIF.
  4. Investors.
  5. What are alternative investment funds?

Mains Link:

Discuss the significance of NIIF in the context infrastructure development in India.

Sources: the Hindu.