NIIF Current Affairs

First NIIF investment: To set up $3-billion platform with DP World

The National Investment and Infrastructure Fund (NIIF) has made its first investment by partnering with DP World to create $3-billion investment platform for ports, terminals, transportation and logistics businesses in India.

The platform will invest in opportunities in ports sector and beyond sea ports into areas such as river ports and transportation, port-led special economic zones, freight corridors, inland container terminals, and logistics infrastructure including cold storage.

Significance

Efficient logistics and cargo movement are critical components for continued growth and development of Indian economy and particularly the manufacturing sector. The platform will reduce the cost of moving cargo between port and origin and destination.

Background

In October 2017, Government had secured investment commitment of up to $1 billion from Abu Dhabi Investment Authority (ADIA). It was first institutional investor in NIIF Master Fund and shareholder in Fund’s investment management company — the National Investment and Infrastructure Limited. Apart from ADIA, four domestic institutional investors also be joined the NIIF Master Fund including ICICI Bank, HDFC Group, , Kotak Mahindra Life and Axis Bank.

National Investment and Infrastructure Fund (NIFF)

NIIF was set up in December 2015 to catalyse funding into the country’s infrastructure sector. It has been registered with the Securities and Exchange Board of India as a Category II Alternate Investment Fund.

It has a targeted corpus of Rs 40,000 crore to be raised over the years — 49% of it will be funded by government at any given point of time. The remaining 51% will be raised from domestic and global investors, including international pension funds, sovereign wealth funds, multilateral/bilateral investors.

It has been set up as a fund of funds structure with aim to generate risk adjusted returns for its investors alongside promoting infrastructure development. Its Governing Council us chaired by Finance Minister Arun Jaitley has already been set up to act as an advisory council to the NIIF.

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First Investment Agreement signed between NIIF and Abu Dhabi Investment Authority

India’s National Investment and Infrastructure Fund (NIIF) of India on has signed an investment agreement worth $1 billion with Abu Dhabi Investment Authority (ADIA). With this, ADIA became first institutional investor in NIIF’s Master Fund and shareholder in NIIF’s investment management Company. NIIF is claimed to be India’s first sovereign wealth fund.

Background

The agreement was signed in pursuant to Memorandum of Understanding (MoU) between Department of Economic Affairs (DEA), Finance Ministry and Government of United Arab Emirates (UAE) to mobilise long term investment into NIIF.

National Investment and Infrastructure Fund (NIIF)

The Union Government has set up NIIF in 2015 with aim to attract investments from both domestic and international sources for infrastructure development in commercially viable projects both Greenfield and Brownfield, including stalled projects. It was envisaged to be Category II Alternative Investment Funds (AIFs) under SEBI Regulations. It will also serve as an umbrella fund with several funds underneath it.

It has proposed corpus of Rs. 40,000 crores (around $6 Billion).  Government’s contribution to NIIF is 49% of total commitment at any given point of time. NIIF has been mandated to solicit equity participation from strategic anchor partners, like overseas sovereign, quasi-sovereign, multilateral and bilateral investors.

Two companies viz. NIIFTL, trustee of fund and NIIFL, investment management company of NIIF were incorporated in 2015. Besides, Governing Council also has been set up under chairmanship of Union Finance Minister to act as an advisory council to NIIF.

Few investors of NIIF

NIIF has singed MoUs with Government of UAE, RUSNANO, QIA, RDIF and Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN). In addition, DEA has signed terms for cooperation on NIIF with UK Treasury and US Treasury. Besides, India-UK Green Growth Equity Fund (GGEF) also has been announced in April 2017.

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