AIIB to invest US$200m in India’s NIIF

The Beijing-based Asian Infrastructure Investment Bank (AIIB) will provide US$100 million to India’s National Investment and Infrastructure Fund’s (NIIF) Fund of Funds in Phase I and is considering a further investment of US$100 million in Phase II

June 25, 2018

The Indian Government has sought project financing worth US$2.4 billion from the AIIB so far; The bank is keen to support the nation’s efforts to promote investment in infrastructure and to mobilize private capital

NIIF, anchored by the Government of India, is a collaborative investment platform for international and domestic investors that are keen on investing in commercially viable Indian infrastructure projects

NIIF’s Fund of Funds will anchor and/or invest in funds managed by fund managers who have good track records in infrastructure and associated sectors in India; Sectors of focus include sustainable infrastructure

AIIB’s investment in the NIIF will help attract long-term investors such as multilateral institutions, sovereign wealth funds, pension funds and insurance firms from India and abroad in the country’s infrastructure sector

Asian Infrastructure Investment Bank (AIIB) has approved an equity investment of US$100 million in India’s National Investment and Infrastructure Fund’s (NIIF) Fund of Funds in Phase I. The Beijing-based multilateral development bank, which focuses on building infrastructure in the Asia-Pacific region, is considering an additional investment of US$100 million in the Phase II. NIIF, anchored by the Government of India, is a collaborative investment platform for international and domestic investors that are keen on investing in commercially viable Indian infrastructure projects. NIIF’s Fund of Funds will anchor and/or invest in funds managed by fund managers who have good track records in infrastructure and associated sectors in India. Some of the sectors of focus include Green Infrastructure, Mid-Income and Affordable Housing, Infrastructure services and allied sectors.

NIIF Fund of Funds recently announced its first investment, Green Growth Equity Fund, which will invest in renewable energy, clean transportation, water, sanitation and waste management. Apart from financial assistance, AIIB will provide expertise to enhance NIIF’s environmental and social risk management capabilities to improve and monitor environmental and social performance across the portfolio investments. The bank’s Chief Investment Officer, DJ Pandian, said that the investment reflected AIIB’s commitment to support the Indian Government’s efforts to promote investment in infrastructure and to mobilize private capital for development. AIIB’s investment in the NIIF will help attract long-term investors such as multilateral institutions, sovereign wealth funds, pension funds and insurance companies from India and abroad in the country’s infrastructure sector.

The Indian Government has sought project financing worth US$2.4 billion from the AIIB so far. The bank had indicated that the funding would go towards six projects in India, including US$500 million for the Mumbai Metro, US$455 million for rural connectivity in Andhra Pradesh and the US$200 million to the NIIF. Prior to the latest funding, AAIB had loaned US$1.2 billion in another six Indian projects. In India, the bank, which boasts of funding commitment worth around US$100 billion, has financed both public and private-sector projects. The bank is looking to increase investment in India’s high-growth industries spanning energy (fuel, electricity and renewable energy), transportation, infrastructure, waste and water management. The bank has traditionally prioritised investment in sustainable infrastructure that are socially, economically and environmentally sustainable.