National Investment and Infrastructure Fund: 5th Governing Council Meeting Highlights
Recently, the 5th meeting of the National Investment and Infrastructure Fund (NIIF) Governing Council was chaired by the Union Minister for Finance & Corporate Affairs. Numerous topics were discussed, including the establishment of India Japan Fund, growth of Non-Banking Financial Companies (NBFCs), exploration of opportunities under various schemes and status updates on different funds. This piece dissects the key points covered in the session.
India Japan Fund
During the meeting, a Memorandum of Understanding (MoU) between NIIF and the Japan Bank for International Development (JBIC) was proposed to establish NIIF’s first bilateral fund, known as the “India Japan Fund”. The document was signed on 9th November, 2022 with contributions from the Government of India (GoI).
Non-Banking Financial Companies (NBFCs)
The Governing Council noted the impressive growth of two infrastructure NBFCs that NIIF holds majority stakes in. Over the past three years, their combined loan book has leapt from Rs. 4,200 crores to Rs. 26,000 crores without any Non-Performing Loans (NPLs) being registered. The council encouraged NIIF to take proactive measures to support both central and state governments in creating a pipeline of investible Public-Private Partnership (PPP) projects.
Opportunities within Schemes
The Finance Minister urged the NIIFL team to explore opportunities within the National Infrastructure Pipeline, PM GatiShakti, and National Infrastructure Corridor schemes. These initiatives include a significant pool of investible greenfield and brownfield investment projects, aimed at bringing commercial capital into these opportunities.
Status of Three Funds
The meeting also served as an update platform for the status of three funds managed by NIIFL. The Master Fund, which heavily invests in infrastructure sectors such as roads, ports, airports, power, etc.; The Fund of Funds (FoF), handled by experienced managers focusing on areas like Green Infrastructure, Mid-Income & Affordable Housing, Infrastructure Services, and related sectors; and finally, the Strategic Opportunities Fund (SoF), with a principal objective to provide long-term capital to high-growth future-ready businesses in India.
Explaining Greenfield vs Brownfield Investment
Greenfield projects refer to investments in new structures or group of structures where no previous facilities exist, typically in manufacturing or office spaces. On the other hand, brownfield investments involve modifying or upgrading existing production facilities to start a new production activity.
About National Investment and Infrastructure Fund (NIIF)
NIIF is a government-affiliated entity that provides long-term capital to India’s infrastructure sector. The Indian government holds a 49% stake, with the remainder held by foreign and domestic investors, making NIIF India’s quasi-sovereign wealth fund. Established in December 2015 as a Category-II Alternate Investment Fund, it now manages over USD 4.3 billion of capital across its three funds, with its registered office in New Delhi.
Last Modified: February 18, 2024