NIIF gets first investment as ADIA decides to inject $1 bn

Infrastructure 17 Oct 2017 by Tojo Jose After nearly two years of its establishment, the National Investment and Infrastructure Fund (NIIF) was got its first investor – the Abu Dhabi Investment Authority (ADIA). As per the NIIF Chief Executive, Sujoy Bose, the Authority will invest $1 bn in the Quasi-Sovereign investment fund.

ADIA, formed in 1976 is a major sovereign fund in the world and uses the foreign exchange reserves of UAE that is mainly obtained from crude oil exports. The Agency is managing a huge $1.320 trillion asset with investment, though its asset under management is expected to be around $800 million. It makes investment in all types of assets – equities, debt instruments including government bonds, infrastructure, real estate, Private Equity, Alternative Investment Funds etc.

“This 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 NIIF’s objectives,” the NIIF chief executive officer Sujoy Bose informed the media.

The NIIF was registered as an Alternative Investment Fund in 2015 with 49% government ownership as a fund of the fund. Prime objective was to sanction Rs 40000 crore loans in a time bound manner to the infrastructure sector. Government kept lower than controlling stake aiming to invite participation of private investors and to quicken procedures.

But it was not able find any investor though discussions were made with several sovereign wealth funds and foreign institutional investors. As per an RTI reply obtained by the New Indian Express early this year, the NIIF was not able to provide any infrastructure loan as well. The only financial activity conducted regarding the NIIF was just government budgetary allocations to make administrative expenditures.

Now with the first investor, NIIF can speed up fund mobilization campaigns among other prospective investors. ADIA’s involvement may prompt the participation of other popular sovereign investors like Qatar Investment Authority (QIA) and Rusnano OJSC of Russia with whom the government has made discussions earlier. The Singapore Government owned Government Investment Corporation is also a good prospective investor from the official angle.


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