5th Meeting of Governing Council of NIIF

• 18 Nov 2022

For Prelims: NIIF, NBFCs, PPP projects, National Infrastructure Pipeline, PM GatiShakti, National Infrastructure Corridor

For Mains: Mobilization of Resources, Growth & Development, Infrastructure

Why in News?

Recently, the Union Minister for Finance & Corporate Affairs chaired the 5^th meeting of the Governing Council (GC) of National Investment and Infrastructure Fund (NIIF).

What are the Highlights of the Meeting?

• India Japan Fund:
  • In a Memorandum of Understanding, NIIF and Japan Bank for International Development (JBIC) have proposed to establish NIIF's first bilateral fund - the "India Japan Fund" - with contributions coming from the Government of India (GoI).
  • The MoU was signed recently on 9^th November, 2022.
• NBFCs:
  • The GC noted that the two infrastructures Non-Banking Financial Companies (NBFCs), where NIIF has majority stakes, have increased their combined loan book from Rs. 4,200 crores to Rs. 26,000 crores in 3 years without experiencing any Non-Performing Loans (NPLs).
  • The GC also guided NIIF to undertake advisory activities proactively to support central and state governments to create a pipeline of investible Public-Private Partnership (PPP) projects.
• Exploring Opportunities under Different Schemes:
  • The Finance Minister exhorted the NIIFL team also to explore opportunities under the National Infrastructure Pipeline, PM GatiShakti and National Infrastructure Corridor.
    • These schemes include a big pool of investible greenfield and brownfield investment projects, and to try and crowd in commercial capital into those opportunities.
• Status of Three Funds:
  • The GC was apprised of the current status of the 3 funds that are currently managed by NIIFL –
    • Master Fund: Invests primarily in operating assets in core infrastructure sectors such as roads, ports, airports, power, etc.
    • Fund of Funds (FoF) : Managed by fund managers with experience in infrastructure and related sectors in India. Green Infrastructure, Mid-Income & Affordable Housing, Infrastructure Services, and allied sectors are some of the areas of focus.
    • Strategic Opportunities Fund (SoF): SOF has been established with the objective to provide long-term capital to high-growth future-ready businesses in India. The fund’s strategy is to build a portfolio of large entrepreneur-led or professionally managed domestic champions and unicorns.

Greenfield vs Brownfield Investment

• Greenfield Project:
  • It refers to investment in a manufacturing, office, or other physical company-related structure or group of structures in an area where no previous facilities exist.
• Brownfield investment:
  • The projects which are modified or upgraded are called brownfield projects.
  • The term is used for purchasing or leasing existing production facilities to launch a new production activity.

What is the National Investment and Infrastructure Fund (NIIF)?

• NIIF is a government-backed entity established to provide long-term capital to the country’s infrastructure sector.
  • The Indian government has a 49% stake in NIIF with the rest held by foreign and domestic investors.
  • With the Centre’s significant stake, NIIF is considered India’s quasi-sovereign wealth fund.
• It was set up in December 2015 as a Category-II Alternate Investment Fund.
• Across its three funds, it manages over USD 4.3 billion of capital.
  • Its registered office is in New Delhi.

UPSC Civil Services Examination, Previous Year Question (PYQ)

Q. With reference to ‘National Investment and Infrastructure Fund’, which of the following statements is/are correct? (2017)

1. It is an organ of NITI Aayog.
2. It has a corpus of `4,00,000 crore at present.

Select the correct answer using the code given below:

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Ans: (d)

Source: PIB