The Union Cabinet is likely to consider on Wednesday a proposal to infuse ₹6,000 crore into the National Investment and Infrastructure Fund (NIIF), a move which will help the entity raise ₹1.10-lakh crore by 2025 for financing infrastructure projects.

According to sources, the fund infusion would be made into the infra debt fund and infra finance company floated by the quasi-sovereign wealth fund.

NIIF Strategic Opportunities Fund has set up a debt platform comprising an NBFC Infra Debt Fund and an NBFC Infra Finance Company.

The platform has a loan book of ₹8,000 crore and deal pipeline of ₹10,000 crore.

The Strategic Opportunities Fund, one of the three funds – which has a more diversified investment strategy, including green-field projects and debt platforms – has a funding commitment of $1 billion from the government.

NIIF makes its first acquisition in roads and highways sector

The proposal to invest ₹6,000 crore as equity into NIIF is part of the Aatmanirbhar Bharat 3.0 package announced earlier this month.

Remaining equity will be raised from private investors.

To support the funding of the National Infrastructure Pipeline of ₹111 lakh crore, Finance Minister Nirmala Sitharaman in her Budget speech this year had said about ₹22,000 crore has already been provided.

This would be towards equity support to infrastructure finance companies such as India Infrastructure Finance Company Ltd (IIFCL) and a subsidiary of NIIF, the Minister had said.

“They would leverage it, as permissible, to create financing pipeline of more than ₹1,00,000 crore. This would create a major source of long-term debt for infrastructure projects and fulfil a long-awaited requirement,” Sitharaman had said.

Published on November 25, 2020