National Investment and Infrastructure Fund (NIIF)

National Investment and Infrastructure Fund

  • It is a sovereign wealth fund created by the Government of India for enhancing infrastructure financing in the country.
  • NIIF was proposed to be set up as a Trust, to raise debt to invest in the equity of infrastructure finance companies such as Indian Rail Finance Corporation (IRFC) and National Housing Bank (NHB). The idea is that these infrastructure finance companies can then leverage this extra equity, manifold.
  • Its creation was announced in the Union Budget 2015-16.
  • NIIF got registered with SEBI as Category II Alternative Investment Fund (AIF) on December 28, 2015.

Operational Aspects

  • The government has set up this Rs. 40000 crore fund to provide long term capital for infrastructure projects.
  • Government can provide upto 20000 crore per annum into these funds.
  • Government’s contribution/share in the corpus will be 49% in each entity set up as an alternate Investment Fund (AIF) and will neither be increased beyond, nor allowed to fall below, 49%.
  • The whole of 49% would be contributed by Government directly.
  • Rest is open for contribution from others.
  • The contribution of Government of India to NIIF would enable it to be seen virtually as a sovereign fund and is expected to attract overseas sovereign/ quasi-sovereign/multilateral/bilateral investors to co-invest in it.