Abu Dhabi cash for core kitty

The Abu Dhabi Investment Authority (ADIA), the sovereign wealth fund of the Gulf emirate, has agreed to invest $1 billion in the National Investment and Infrastructure Fund.

By Our Special Correspondent
  • Published 17.10.17
  •  

New Delhi: The Abu Dhabi Investment Authority (ADIA), the sovereign wealth fund of the Gulf emirate, has agreed to invest $1 billion in the National Investment and Infrastructure Fund.

The government has set up the fund to attract investments from both domestic and international sources for infrastructure development in commercially viable projects.

"As part of the comprehensive partnership agreement, ADIA 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 NIIF said in a statement on Monday.

NIIF CEO Sujoy Bose said the agreement marks the culmination of an extensive process of collaboration with ADIA to develop an investment structure that is attractive to international investors, while remaining closely aligned with the NIIF's objectives.

"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," he said.

Khadem al Remeithi, executive director (real estate and infrastructure department), ADIA, said the fund was set to play an important role in facilitating the flow of foreign capital into India's infrastructure sector.

Six domestic institutional investors (DIIs) - HDFC Standard Life Insurance Company Limited, HDFC Asset Management Company Limited, Housing Development Finance Corporation Limited, ICICI Bank, Kotak Mahindra Old Mutual Life Insurance and Axis Bank - will also be joining the NIIF Master Fund along with ADIA, apart from the government.

Subhash Chandra Garg, secretary (economic affairs), said: "This agreement paves the way for creating significant economic impact through investment in commercially viable infrastructure development projects."

The corpus of the NIIF is proposed to be Rs 40,000 crore wherein the government will invest 49 per cent. It will raise third party capital for the remaining Rs 20,000 crore, from long-term international investors such as sovereign wealth funds, insurance and pension funds, and endowments.

NIIF's investment strategy includes a provision to anchor equity, quasi-equity and debt funds in partnership with investors targeting investments in the relevant sectors in India.

The NIIF was set up in December 2015 in a tax-efficient manner as a category-II Alternate Investment Fund, which was eligible for a pass-through status under the income tax act, to attract investors.