Arun Jaitley, India’s Finance Minister, is trying to entice sovereign wealth funds of the United Arab Emirates (UAE) to invest in the country’s National Infrastructure and Investment Fund (NIIF).
The Abu Dhabi Investment Authority (ADIA) has shown interest in the initiative, according to a statement issued in the wake of the Minister’s two-day visit to Dubai this week. India is hoping to raise $75 billion for the vehicle.
ADIA’s team will be visiting India tomorrow to further discuss the matter.
The $773 billion fund is also keen to invest in strategic oil reserves at Mangalore Port in Karnataka, and committed to invest $200 million in Indian renewables last month.
“The investment in NIIF will ensure good returns as the government will invest these funds in infrastructure projects,” said Jaitley.
With an initial authorised corpus of INR200 billion (€2.83 billion; $3.02 billion), NIIF was set up in August to invest in and manage profitable infrastructure projects in the country.
The government holds a 49 percent stake in NIIF, which is structured as a sovereign wealth fund. Modelled on Temasek, Singapore’s state-owned investment vehicle, NIIF will provide equity to projects in sectors deemed key to boost India’s economy.
Set to become operational by the end of the year, the fund will look at both greenfield and brownfield projects. It will also support schemes that have stalled due to the lack of equity funding.
“Long-term investors want to ensure predictability, growth and returns,” Jaitley told reporters, adding that the government would pursue legal reforms and improve tax predictability to make the market friendlier to sovereign wealth funds.