First NIIF investment: To set up $3-billion platform with DP World

The National Investment and Infrastructure Fund (NIIF) has made its first investment by partnering with DP World to create $3-billion investment platform for ports, terminals, transportation and logistics businesses in India.
The platform will invest in opportunities in ports sector and beyond sea ports into areas such as river ports and transportation, port-led special economic zones, freight corridors, inland container terminals, and logistics infrastructure including cold storage.

Significance

Efficient logistics and cargo movement are critical components for continued growth and development of Indian economy and particularly the manufacturing sector. The platform will reduce the cost of moving cargo between port and origin and destination.

Background

In October 2017, Government had secured investment commitment of up to $1 billion from Abu Dhabi Investment Authority (ADIA). It was first institutional investor in NIIF Master Fund and shareholder in Fund’s investment management company — the National Investment and Infrastructure Limited. Apart from ADIA, four domestic institutional investors also be joined the NIIF Master Fund including ICICI Bank, HDFC Group, , Kotak Mahindra Life and Axis Bank.

National Investment and Infrastructure Fund (NIFF)

NIIF was set up in December 2015 to catalyse funding into the country’s infrastructure sector. It has been registered with the Securities and Exchange Board of India as a Category II Alternate Investment Fund.
It has a targeted corpus of Rs 40,000 crore to be raised over the years — 49% of it will be funded by government at any given point of time. The remaining 51% will be raised from domestic and global investors, including international pension funds, sovereign wealth funds, multilateral/bilateral investors.
It has been set up as a fund of funds structure with aim to generate risk adjusted returns for its investors alongside promoting infrastructure development. Its Governing Council us chaired by Finance Minister Arun Jaitley has already been set up to act as an advisory council to the NIIF.

Month: Current Affairs - January, 2018