Singapore’s Temasek to invest $400 million in NIIF’s Master Fund
NIIF signs an agreement for investment of up to $400 million with Singapore-based Temasek
Mumbai: Singapore’s Temasek has agreed to invest as much as $400 million in the National Investment and Infrastructure Fund (NIIF), a fund set up by the government of India to boost infrastructure financing in the country.
With this, Temasek joins government of India, Abu Dhabi Investment Authority (ADIA), HDFC Group, ICICI Bank Ltd, Kotak Mahindra Life Insurance and Axis Bank Ltd as investors in NIIF’s Master Fund.
Last year, ADIA committed to invest as much as $1 billion in NIIF’s Master Fund. The other domestic private sector investors have together invested ₹500 crore in the fund.
“We are delighted to have Temasek as an investor in the NIIF Master Fund and as a shareholder of National Investment and Infrastructure Ltd, alongside other eminent institutional investors. Temasek is one of the most renowned institutional investors globally and will add to the roster of marque investors backing NIIF,” said Sujoy Bose, managing director and chief executive at NIIF.
Apart from the Master Fund, NIIF also operates a Fund of Funds, through which it has invested 120 million pounds in Green Growth Equity Fund (GGEF), which will invest in renewable energy and other green businesses. GGEF is targeting to raise £500 million for the fund.
As of 31 March, Temasek’s portfolio stood at $235 billion with significant exposure to Singapore and the rest of Asia.
“We are pleased to be able to participate in India’s growth, through our investment alongside the Indian government and other institutions in the NIIF. The fund reflects the government’s intent to channel capital into funding infrastructure assets and platforms, such as those in the transport, energy and urban infrastructure space, that would further support the development of sectors required for India’s continued growth,” said Rohit Sipahimalani, joint head - India, Temasek.
The government had set up the ₹40,000 crore NIIF in 2015 as an investment vehicle for funding commercially viable greenfield, brownfield and stalled infrastructure projects. The Indian government is investing 49% and the rest of the corpus is to be raised from third-party investors such as sovereign wealth funds, insurance and pension funds, endowments, etc.
NIIF’s mandate includes investing in areas such as energy, transportation, housing, water, waste management and other infrastructure-related sectors in India.
In January, NIIF and Dubai-based port operator DP World announced the creation of an investment platform—Hindustan Infralog—to invest in ports, terminals, transportation and logistics businesses in India. The platform will invest up to $3 billion of equity to acquire assets and develop projects in these sectors.
GGEF is targeting to raise £500 million for the fund and is managed by EverSource Capital, a joint venture of home-grown private equity firm Everstone Group and Lightsource BP. The Asian Infrastructure Investment Bank is looking to invest $200 million in the Fund of Funds.
“We are targeting a corpus of over ₹14,000 crore for the Master Fund, while the Fund of Funds will have a corpus of around ₹7,000 crore,” said Bose.
Under the Fund of Funds, NIIF is keen on investing in funds focusing on affordable housing, digital infrastructure and allied infrastructure services, he added.
NIIF is in early discussions for raising another fund—the Strategic Investment Fund—which will invest in both greenfield projects and operational assets, said Bose.
“This fund will be a very long fund. It is meant to solve market problems that the other funds are not solving. The strategy will be to look at both buying operating assets and building new ones. We are keen on greenfield projects across sectors such as roads, ports, airports,” said Bose.
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