International pension funds and sovereign wealth funds from countries such as Russia, Singapore and the UAE have evinced interest in participating in India's Rs.40,000-crore National Investment and Infrastructure Fund (NIIF), the government has said, in what could bode well for the country's infrastructure story.
The NIIF is meant to fund development of infrastructure projects, including reviving stalled ones. The government will invest Rs.20,000 crore into the NIIF from the Budget, with another Rs.20,000 crore expected to come from private investors.The government's share of the NIIF's corpus is envisaged to be under 50%.
Jaitley's deputy and Junior Finance Minister Jayant Sinha said the NIIF, whose creation is among the major initiatives of the Narendra Modi administration to fix India's infrastructure woes, would serve as an umbrella fund with several funds underneath it.
Market regulator Sebi has already approved the setting up of the NIIF, which was approved by the Cabinet last July, as a Category II Alternative Investment Fund (AIF) on December 28, 2015. The NIIF could provide equity support to stuck infrastructure projects, giving other foreign funds comfort to take them over.Large greenfield projects could also be taken up by the fund in various sectors.
Besides sponsoring funds, the NIIF could also invest directly in projects and Sinha noted that there was a full pipeline of greenfield, brownfield as well as stressed projects. A government official said some key transportation projects could be taken up initially by the NIIF for funding.
The government has identified revamp of country's creaky infrastructure as a key focus area and the NIIF seeks to address gaps in long-term funding for the sector. It will be overseen by a governing council headed by Jaitley and its other members include the secretaries of economic affairs and financial services, SBI Chairperson Arundhati Bhattacharya, former Infosys executive TV Mohandas Pai and Hemendra Kothari. The council, which on Tuesday discussed possible projects that may be taken up under the NIIF, is slated to meet again in March.

No comments: