National Investment and Infrastructure Fund gets $1 bn from Abu Dhabi Investment Authority

New Delhi: The National Investment and Infrastructure Fund (NIIF) of India and Abu Dhabi Investment Authority (ADIA) today signed an investment agreement worth USD 1 billion, the finance ministry said.

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Representational image. Reuters

The government has set up NIIF with the aim to attract investments from both domestic and international sources for infrastructure development in commercially viable projects.

As part of the agreement, ADIA will become the first institutional investor in NIIFs Master Fund and a shareholder in the NIIFs investment management company, the statement said.

Earlier a Memorandum of Understanding (MoU) was signed between the Department of Economic Affairs and the Government of United Arab Emirates (UAE) to mobilise long term investment into NIIF.

"The first investment agreement between NIIF Master Fund and a wholly owned subsidiary of Abu Dhabi Investment Authority (ADIA) has been signed today," the ministry said, adding the investment from ADIA Group would be 1 billion USD.

Six domestic Institutional Investors (DIIs) -- 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, Axis Bank Limited -- will also be joining the NIIF Master Fund along with ADIA apart from Government of India.

Commenting on the development, Economic Affairs Secretary 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."

Funds CEO Sujoy Bose said the agreement marks the culmination of an extensive process of collaboration with ADIA to develop an investment structure that is attractive to international investors while remaining closely aligned with the NIIFs objectives.

"We are proud to have ADIA as our founding partner and are grateful for its support and contributions to date, and we now look forward to announcing further agreements with other investors," he said.

Khadem AlRemeithi, Executive Director of the Real Estate and Infrastructure Department at ADIA, said the NIIF is set to play an important role in facilitating the flow of foreign capital into Indias infrastructure sector.
The corpus of the NIIF is proposed to be Rs 40,000 crore (USD 6 billion) wherein the government would invest 49 per cent.

NIIF will raise third party capital for the remaining Rs 20,000 crore (USD 3 billion), from long term international investors, such as a sovereign wealth funds, insurance and pension funds, and endowments.

The ministry further said that a few investors -- Government of UAE, RUSNANO, QIA, RDIF and Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development (JOIN) have signed MoUs with the NIIF.
In addition, the Department of Economic Affairs has signed terms for cooperation on the NIIF with the US Treasury and the UK Treasury.

An India-UK Green Growth Equity Fund (GGEF) 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. PTI NKD CS MKJ

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Updated Date: Oct 17, 2017 09:17:18 IST

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