NIIF To Raise $2 Billion Private Credit Fund

The National Investment and Infrastructure Fund (NIIF) is a government-backed initiative in India aimed at boosting infrastructure investment. Established in 2015, it seeks to attract international capital for various projects in the country. As of 2025, NIIF is planning to raise a $2 billion private credit fund, which would be the largest of its kind in India. This initiative is in early discussions with sovereign investors to secure their participation.

Establishment and Ownership

• NIIF is headquartered in Mumbai and operates under the Ministry of Finance.
• The fund is 49% owned by the Government of India and 51% by sovereign wealth and pension funds from across the globe.
• Notable investors include Canada’s Ontario Teachers’ Pension Plan, Australia’s AustralianSuper, the UAE’s Abu Dhabi Investment Authority, and Singapore’s Temasek.

Objectives of NIIF

• The primary objective of NIIF is to mobilise long-term capital for infrastructure projects.
• It aims to raise funds through various instruments, including offshore credit-enhanced bonds.
• NIIF also seeks to attract anchor investors and provide advisory services for infrastructure projects.
• The fund focuses on both Greenfield and Brownfield projects.

Types of Funds Managed by NIIF

NIIF manages three main types of funds:

• Master Fund: Invests in established enterprises with long-term agreements in regulated environments.
• Fund of Funds (FoF): Aims to invest in funds managed by experienced fund managers, facilitating greater capital accumulation.
• Strategic Fund: Primarily invests in equity and equity-linked instruments, registered as an Alternative Fund II under SEBI regulations.

Investment Strategy and Portfolio Diversification

NIIF’s investment strategy focuses on diversifying its portfolio across different sectors such as green infrastructure, affordable housing, and healthcare. The fund aims to reduce risks by investing in various asset classes and industries. The first Fund of Funds received commitments of $600 million and aims to invest in up to ten private equity funds in India.

Impact on the Indian Economy

NIIF plays important role in channeling international capital into the Indian economy. By focusing on infrastructure development, it aims to maximise economic growth and enhance the quality of life for citizens. The fund supports large-scale projects that can have impact on various sectors.

Month: Current Affairs - February, 2025

Category: Economy & Banking Current Affairs