Saturday, 1 August 2015

National Investment and Infrastructure Fund to be operational by year end

India's own sovereign wealth like entity - National Investment and Infrastructure Fund, modelled on Singapore's investment vehicle Temasek, will be operational by the end of this year and provide equity finance to core sector projects to boost economic activity.

NIIF will be a commercially run organisation and operate at arm's-length from the government, Minister of State for Finance Jayant Sinha told reporters here.

Government will provide Rs 20,000 crore from Budget as seed money to the fund, which will provide equity support to infra project as well as funding agencies like IFCI BSE 3.31 % and NHB.

While the government would own 49 per cent of NIIF, which will be based out of Mumbai, equity participation from strategic anchor partners like sovereign wealth funds will be sought, he said.

NIIF will look at both greenfield as well as brownfield projects and "will fill the gap of equity financing," he said. It would also support stalled project.

The fund will have its own governing council and the management will be paid market salaries to attract best talent.

"We are looking for long-term investors in NIIF," he said, adding that provident funds, endowment and sovereign funds have expressed interest. "NIIF is like a sovereign wealth fund focused on infrastructure sector," Sinha said.

The Cabinet had earlier this week cleared setting up of NIIF, which was originally announced by Finance Minister Arun Jaitley in his budget for 2015-16.

Money from the fund would be routed to provide equity support to those NBFCs and financial institutions which are engaged in infrastructure financing across sectors, and corpus to JAMCs and equity/debt to commercially viable infrastructure and other projects.

NIIF's governing council will have government representatives and experts, eminent economists and infrastructure professionals.

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