Abu Dhabi to invest US$1bn in India’s NIIF
The Abu Dhabi Investment Authority (ADIA) signed an agreement worth US$1bn with the National Investment and Infrastructure Fund (NIIF) of India to facilitate the flow of foreign capital for infrastructure development in the country.
ADIA, one of the largest sovereign wealth funds in the world, will become the first institutional investor in NIIF’s Master Fund and a shareholder in National Investment and Infrastructure Limited, the NIIF’s investment management company, the two companies announced yesterday.
According to the Memorandum of Understanding (MoU), the Department of Economic Affairs, Ministry of Finance and the Government of United Arab Emirates will jointly work to mobilise more long-term investment into NIIF.
Khadem Al-Remeithi, Executive Director of Real Estate & Infrastructure at ADIA, said, "The NIIF is set to play an important role in facilitating the flow of foreign capital into India's infrastructure sector.
“As a long-standing investor in India and in infrastructure globally, ADIA welcomes the opportunity to be the first to partner with NIIF in a platform that is sure to be of interest to other long-term institutional investors."
The agreement came after an extensive process of collaboration with ADIA to develop an investment structure that is attractive to international investors, Sujoy Bose, Chief Executive Officer of NIIF said.
“We are proud to have ADIA as our founding partner, and grateful for its support and contributions to date, and we now look forward to announcing further agreements with other investors.”
Narendra Modi’s government’s ambitious infrastructure investment fund, set up in December 2015 to boost the funding into the country’s core sector, had not been able to fetch a single investment in any project until recently.
NIIF, which has a mandate to fund commercially viable greenfield, brownfield and stalled projects, is yet to start investing.
Among the infrastructure areas NIIF is targeting are housing, water, waste management and energy.
Besides ADIA, six more homegrown institutional investors will also join the NIIF Master Fund, namely – HDFC Standard Life Insurance, HDFC Asset Management, Housing Development Finance Corp, ICICI Bank, Kotak Mahindra Old Mutual Life Insurance and Axis Bank.
Commenting on the development, Economic Affairs Secretary Subhash Chandra Garg said: "This is a significant milestone in operationalisation of NIIF.
“This agreement paves the way for creating significant economic impact through investment in commercially viable infrastructure development projects."