INFRASTRUCTURE FUNDING

Subject: Economy

Context: To drive infrastructure creation in the country, the Union Cabinet approved the infusion of ₹6,000 crore equity in National Infrastructure Investment Fund’s (NIIF’s) debt platform in the next two years.

Concept:

• Out of the proposed amount, ₹2,000 crore will be infused in the current financial year.
• NIIF Debt Platform is sponsored by National Investment and Infrastructure Fund (NIIF), comprising of Aseem Infrastructure Finance Limited (AIFL) and NIIF Infrastructure Finance Limited (NIIF-IFL).
• The NIIF Strategic Opportunities Fund has set up a Debt Platform comprising an NBFC Infra Debt Fund and an NBFC Infra Finance Company.
• NIIF through its Strategic Opportunities Fund (‘NIIF SOF’) owns a majority position in both the companies and has already invested ~ Rs.1,899 crore across the Platform.
• The Strategic Opportunities Fund (SOF fund) through which the NIIF investment has been made will continue to support the two companies apart from investing in other suitable investment opportunities.

NIIF:

• The government had set up the NIIF in 2015 as an investment vehicle for funding commercially viable greenfield, brownfield and stalled infrastructure projects.
• The Indian government is investing 49% and the rest of the corpus is to be raised from third-party investors such as sovereign wealth funds, insurance and pension funds, endowments, etc.
• 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).