National Infrastructure Investment Fund to get $1 bn investment from Abu Dhabi fund

The Abu Dhabi Investment Authority (ADIA) will invest $1billion in the National Investment and Infrastructure Fund (NIIF), providing an impetus to India's efforts to raise equity funds for its ambitious infrastructure development programme.

NIIF Master Fund signed the agreement with a wholly owned subsidiary of Abu Dhabi Investment Authority (ADIA), one of the largest sovereign wealth funds in the world, towards this, NIIF said in a statement.

ADIA will be the first institutional investor in NIIF's Master Fund and a shareholder in National Investment and Infrastructure Ltd, the NIIF's investment management company.

Six domestic institutional investors - HDFC Standard Life Insurance, HDFC Asset Management, Housing Development Finance Corp, 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.

''This is a significant milestone in operationalisation of NIIF,'' said Subhash Chandra Garg, economic affairs secretary.

''This agreement paves the way for creating significant economic impact through investment in commercially viable infrastructure development projects,'' he said.

The government has kept its stake in NIIF at 49 per cent, giving it private sector character and operational flexibility and making it more attractive to sovereign wealth funds besides multilateral and bilateral investors.

It's structured as an alternative investment fund (AIF) under Securities and Exchange Board of India regulations and will provide equity support to infrastructure projects. It will initially target a corpus of Rs40,000 crore.

''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,'' NIIF CEO Sujoy Bose said.

Khadem Al Rumaithi, executive director of real estate and infrastructure at ADIA, said the fund is set to play an important role in facilitating the flow of foreign capital into India's infrastructure sector.

ADIA is among the most active foreign investors in India and has deployed its funds across asset classes in India, including equities, fixed income, real estate and private equity. It is a large limited partner of several India and Asia-focused PE funds. It has backed two of the largest renewable energy companies in the country, investing $350 million in ReNew Power and Greenko.