The Union Cabinet has approved an additional Government of India investment commitment of Rs 30,000 crore for new and upcoming funds of the National Investment and Infrastructure Fund.
With the fresh approval, the government’s total commitment to NIIF has increased to Rs 60,000 crore.
In a statement on Monday, 29 June, the Ministry of Finance said the decision is aimed at accelerating infrastructure investment and bringing more institutional capital into India.
The approval was given by the Union Cabinet under the leadership of Prime Minister Narendra Modi.
NIIF is India’s sovereign-anchored fund and is professionally managed by National Investment and Infrastructure Fund Limited.
The Government of India holds a 49 per cent share in NIIF.
According to the ministry, NIIF currently manages capital commitments of around Rs 40,000 crore across its funds and investment strategies. It has also returned close to Rs 12,000 crore to investors through large portfolio exits.
The additional Rs 30,000 crore commitment will be used for setting up NIIF’s second infrastructure-focused fund.
The new fund will be the successor to NIIF’s first flagship infrastructure fund.
NIIF Infrastructure Fund II is proposed to have a target corpus of close to Rs 30,000 crore. It is expected to invest across transportation, energy, digital infrastructure and emerging areas such as urban infrastructure and e-mobility.
The allocation will also support NIIF’s new fund strategies, successor bilateral funds and other strategic funds aligned with India’s long-term investment priorities.
The ministry said NIIF has raised capital from major institutional investors, including sovereign wealth funds, pension funds, multilateral development institutions and domestic financial institutions.
Its investors include Abu Dhabi Investment Authority, AustralianSuper, CPP Investments, Ontario Teachers’ Pension Plan, PSP Investments, Temasek, Asian Infrastructure Investment Bank, New Development Bank, Asian Development Bank, Japan Bank for International Cooperation, U.S. International Development Finance Corporation, Axis Bank, HDFC Group, ICICI Bank, Kotak Mahindra Life Insurance and State Bank of India.
These investors come from countries including Australia, Canada, Japan, Singapore, the United Arab Emirates and the United States.
NIIF currently operates four investment strategies covering infrastructure, private markets, growth equity and climate investments in the India-Japan business corridor.
The ministry said NIIF’s first infrastructure fund has a corpus of Rs 16,000 crore and is India’s largest domestic infrastructure fund.
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It has created platforms across transportation, including roads, ports, logistics and airports; energy, including renewables, smart meters and power transmission; and digital infrastructure.
NIIF’s Private Markets Fund has invested in multiple daughter Alternative Investment Funds managed by Indian fund managers.
These funds have invested in areas such as climate, affordable housing, affordable healthcare and venture capital or technology sectors.
Its Strategic Opportunities Fund has focused on growth sectors such as financial services, healthcare and manufacturing.
NIIF’s India-Japan Fund is its first bilateral fund. It focuses on climate and circular economy, energy transition and investments connected with the India-Japan business corridor.
Collectively, NIIF-managed funds have deployed capital across transportation, energy transition, healthcare, digital infrastructure, electric mobility, affordable housing, manufacturing and technology across several Indian states and Union Territories.
The ministry said these investments are aligned with national priorities such as Gati Shakti, Digital India, Make in India, India’s climate commitments and schemes including FAME and PM E-DRIVE.
NIIF also plays an advisory role for central government departments and state entities on public-private partnership initiatives and investment structures.
According to the ministry, this has included support for the structuring of the Maritime Development Fund and the Research Development and Innovation Fund, along with advisory work on monetisation, PPP models and sector-specific investment frameworks.
The government expects the additional commitment to support investment in infrastructure and nationally important sectors, including transportation, energy, digital infrastructure, urban infrastructure and e-mobility.
The ministry said the allocation is expected to support high-quality infrastructure, direct and indirect job creation and the growth of key sectors, while contributing to Atmanirbharta and the country’s Viksit Bharat 2047 goal.
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