National Investment And Infrastructure Fund Inks $1-Billion Pact With Abu Dhabi Wealth Fund
Abu Dhabi Investment Authority becomes first institutional investor in NIIF’s Master Fund.
National Investment and Infrastructure Fund of India today signed a $1-billion agreement with a wholly owned subsidiary of Abu Dhabi Investment Authority.
Through this partnership, the sovereign wealth fund, owned by Emirates of Abu Dhabi, will become a shareholder in National Investment and Infrastructure Ltd., NIIF’s investment management company, NIIF said in a statement. As part of the pact, Abu Dhabi Investment Authority will also become the first institutional investor in NIIF’s Master Fund.
NIIF is a collaborative investment platform for international and Indian investors sponsored by the Government of India. Playing the role of a fund manager, the institution seeks to create long-term value for domestic and international investors seeking to invest in energy, transportation, housing, water, waste management and other infrastructure-related sectors in India.
This 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 NIIF’s objectives.Sujoy Bose, Chief Executive Officer, NIIF
Khadem AlRemeithi, Executive Director of the Real Estate and Infrastructure Department at ADIA, said the fund is set to play an important role in facilitating the flow of foreign capital into India's infrastructure sector.
“On a macro level, we are encouraged by India’s positive political outlook and steadily maturing regulatory and legal systems,” AlRemeithi said. ADIA manages a global investment portfolio diversified across more than two-dozen asset classes and sub-categories.
The corpus of the NIIF is proposed to be Rs 40,000 crore ($6 billion), of which the government will invest 49 percent. It will raise third party capital for the remaining Rs 20,000 crore ($3 billion), from long-term international investors, such as a sovereign wealth funds, insurance and pension funds and endowments.
The Department of Economic Affairs, under the Ministry of Finance had recently announced a joint fund with the U.K. called Green Growth Equity Fund under NIIF. UK and Indian government would together invest about Rs 2,060 crore or £240 million. This fund intends to raise around £500 million and will invest in green infrastructure projects in India.
Several other marquee investors like Government of United Arab Emirates, Russia government backed RUSNANO, Qatar Investment Authority, Russian Direct Investment Fund, and Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) have signed memorandum of understanding with NIIF, but not actually invested in the fund so far.
NIIF has been set up as ‘a fund of funds’ with the objective to generate risk adjusted returns for its investors, and promote infrastructure development in India. The trustee of NIIF is National Investment and Infrastructure Fund Trustee Ltd. which is a 100 percent Government of India owned company, while NIIF Ltd is the investment manager to NIIF.
(With inputs from Nikunj Ohri)