Increasing lengths of National Investment Infrastructure Fund reach
The fund is going to acquire controlling interest in private infrastructure lender IDFC. The acquisition will be the first of its kind and as a strategic fund and first controlled transaction. The NIIF is a trust that raises debt to invest in the equity of infrastructure finance companies. Indian Government own 40 percent of the fund and it acts like a banker's bank in infrastructure financing. The fund, although, acts like a typical sovereign wealth fund which is owned by state and invests in foreign countries but does not invest in assets such as stocks, bonds, real estate, commodities etc like an SMF but cannot be called the same.
- It provides equity support to NBFCs and Financial Institutions engaged in infrastructure activties.
- Investing in the corpus created by Asset Management Companies (AMCs) for investing in private equity.
- Considering and approving candidate companies/institutions/ projects (including state entities) for investments and periodic monitoring of investments.
- The fund also provides equity to the green and brown field projects as well as the stalled projects and thus can be considered as Alternative Investment Fund as per the norms of SEBI and comes under the ambit of it.
- NIIF would have full autonomy for project selection.
- NIIF aims to maximize risk-adjusted returns on the investments over a long term by making investments in infrastructure sector on a commercial basis.
- The Abu Dhabi Investment Authority (ADIA) became the first institutional investor in the NIIF with an investment of $1 billion
- An India-UK Green Growth Equity Fund (GGEF) is also being set-up under the fund of funds under NIIF
- GGEF shall receive funds worth 120 million each from Government of India (through NIIF) and Government of UK
- The fund aims to leverage private sector investment from the City of London to invest in Green Infrastructure Projects in India