India's National Investment and Infrastructure Fund, a $6 billion quasi-sovereign infrastructure vehicle, has secured its first institutional commitment of $1 billion from Abu Dhabi Investment Authority.
The agreement will see ADIA become the first institutional investor in NIIF's master fund and a shareholder in the Indian fund's investment management company, according to a statement by India's Ministry of Finance.
Six domestic institutional investors, including HDFC Standard Life Insurance, HDFC Asset Management, Housing Development Finance Corporation, ICICI Bank, Kotak Mahindra Old Mutual Life Insurance and Axis Bank, are set to join the NIIF master fund alongside ADIA and the Indian government, though their commitments were not disclosed.
“This is a significant milestone in the operationalisation of NIIF. This agreement paves the way for creating significant economic impact through investment in commercially viable infrastructure projects,” commented Shri Subhash Chandra Garg, India's economic affairs secretary.
The NIIF was established by the Indian government in July 2015 in a bid to attract private capital to fund India's infrastructure development. The Indian government committed to half of the $6 billion fund for a 49 percent shareholding, while it has been working to raise the rest from the domestic and international institutional markets over the past year.
The Ministry of Finance said that the NIIF has signed MoUs with several investors, including the government of the United Arab Emirates, Russia's RUSNANO and Russia Direct Investment Fund, Qatar Investment Authority and Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development. It is also understood that the Beijing-based Asian Infrastructure Investment Bank is considering a $200 million commitment to the NIIF.
In a partnership with the UK government, the NIIF set up a £500 million ($664 million; €564 million) Green Growth Equity Fund, a sub-vehicle targeting green infrastructure investment in India early this April.