National Investment and Infrastructure Fund (NIIF)

  • National Investment and Infrastructure Fund (NIIF) is a fund created by the Government of India for enhancing infrastructure financing in the country.
  • This is different from the National Investment Fund.
  • NIIF was proposed to be set up as a Trust, to raise debt to invest in the equity of infrastructure finance companies such as Indian Rail Finance Corporation (IRFC) and National Housing Bank (NHB). The idea is that these infrastructure finance companies can then leverage this extra equity, manifold. In that sense, NIIF is a banker of the banker of the banker.
  • NIIF is envisaged as a fund of funds with the ability to make direct investments as required. As a fund of fund it may invest in other SEBI registered funds.
  • Its creation was announced in the Union Budget 2015-16. The operational framework was approved on 20 August 2015.NIIF got registered with SEBI as Category II Alternative Investment Fund (AIF) on December 28, 2015. A website was created on 8 June 2016.Mr. Sujoy Bose, Director and Global Co-Head, Infrastructure and Natural Resources, International Finance Corporation(IFC), Washington DC, was appointed as the first Chief Executive Officer (CEO) of NIIF Ltd on 27 June 2016.
  • Financial Times (London) had adjudged NIIF as the Most Innovative structure in Asia Pacific under Finance category.

Objective

  • The objective of NIIF would be to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects.
  • It could also consider other nationally important projects, for example, in manufacturing, if commercially viable.

Functions of NIIF

The functions of NIIF are as follows:

  1. Fund raising through suitable instruments including off-shore credit enhanced bonds, and attracting anchor investors to participate as partners in NIIF;
  2. Servicing of the investors of NIIF.
  3. Considering and approving candidate companies/institutions/ projects (including state entities) for investments and periodic monitoring of investments.
  4. Investing in the corpus created by Asset Management Companies (AMCs) for investing in private equity.
  5. Preparing a shelf of infrastructure projects and providing advisory services.

NIIF

  1. provides equity / quasi-equity support to those Non Banking Financial Companies (NBFCs)/Financial Institutions (FIs) that are engaged mainly in infrastructure financing. These institutions will be able to leverage this equity support and provide debt to the projects selected.
  2. Invest in funds engaged mainly in infrastructure sectors and managed by Asset Management Companies (AMCs) for equity / quasi-equity funding of listed / unlisted companies.
  3. provides Equity/ quasi-equity support / debt to projects, to commercially viable projects, both greenfield and brownfield, including stalled projects.

Source:Arthpedia

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