Prime Minister Narendra Modi’s ambitious National Investment and Infrastructure Fund has just got its first foreign investor – Abu Dhabi Investment Authority or ADIA – which will invest USD 1 billion, almost two years after NIIF’s creation in 2015. Ministry of Finance on Monday issued a press statement saying that an agreement between India and ADIA Group has been signed to mobilise long term investment into NIIF.
“As a part of the agreement, ADIA will become the first institutional investor in NIIF’s Master Fund and a shareholder in the National Fund’s investment management Company,” the press statement said.
The NIIF was created in 2015 with a proposed corpus of Rs 40,000 crores. The state’s contribution to the Fund shall be 49 per cent of the total commitment at any given point of time. The NIIF has been mandated to solicit equity participation from strategic partners such as overseas investors that could include sovereign/quasi-sovereign/multilateral/bilateral investors.
Speaking on ADIA’s USD 1 billion investment, Economic Affairs Secretary Shri Subhash Chandra Garg said: “This is a significant milestone in operationalisation of NIIF. This Agreement paves the way for creating significant economic impact through investment in commercially viable infrastructure development projects.”
Apart from ADIA, several other investors such as Government of UAE, Russia-based RUSNANO, Qatar Investment Authority or QIA, Russian Direct Investment Fund and Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development or JOIN- have signed agreements with the National Fund.
In addition, DEA has signed terms for cooperation on the NIIF with the US Treasury and the UK Treasury, the Finance Ministry said. It further said that an India-UK Green Growth Equity Fund has been announced in April 2017. “The fund shall be set up under the fund of funds vertical of NIIF, and shall have anchor commitments of GBP 120 million each from Government of India (through NIIF) and Government of UK,” the statement said.
Alongwith foreign investors, there are six other domestic institutional investors who will also be joining the government’s NIIF Master Fund. These domestic investors are – HDFC Standard Life Insurance Company Limited, HDFC Asset Management Company Limited, Housing Development Finance Corporation Limited, ICICI Bank Limited, Kotak Mahindra Old Mutual Life Insurance Limited and Axis Bank Limited.
The government has set up a Governing Council to act as an advisory council to NIIF. The Council will be headed by Finance Minister Arun Jaitley.