National Infrastructure Investment Fund (NIIF) is in discussion with investors to raise money for key infrastructure projects and is in the process of finalising two of them in a month’s time. “We have shortlisted investors. Seven memorandum of understandings (MoU) has been signed as of now…investors are doing due diligence before committing,” a source in know of the matter told Moneycontrol. While the official did not spell out the name of global investors, he said that a UK-based firm has shown keen interest in investing in renewable energy sector in India. “It should be finalised in a month,” the source said, adding that United Arab Emirates (UAE)-based sovereign fund has also shown firm interest in investing in India’s road projects.
It is also in an advanced stage of discussion. Besides, renewable energy and road projects, some investors have shown interest in funding other sectors including airports and ports, the source said. The government hopes to raise at least Rs 1,000 crore by the end of the month, another official in know of the development said. As per the latest Budget estimates, the government has lowered the allocation for NIIF to Rs 1,000 crore in the revised estimates from Rs 4,000 crore during 2016-17. The budgeted estimated for financial year 2017-18 has also been kept at Rs 1,000 crore. “It (Rs 1,000 crore) has been fixed keeping in view the expected inflows. We can always ramp it up later during the year if we see more interest from global investors,” the official explained.
The allocation for 2016-17 was revised, based in the investment that the government expected to come in, the official further said. In 2015, the Centre had set up NIIF—a quasi-sovereign wealth fund—for funding commercially viable greenfield, brownfield and stalled projects. The corpus of the Fund is proposed to be Rs 40,000 crore, where the government would invest 49% or an amount equivalent to nearly Rs 20,000 crore. NIIF will raise third party capital for the remaining Rs.20,000 crore from long term international investors, such as sovereign wealth funds, insurance, pension funds and endowments among others. The fund has been set up as a fund of funds structure with an aim to generate risk adjusted returns for its investors, along with promoting infrastructure development and technology through investments.