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Business News/ Industry / Infrastructure/  Govt sets up NIIF to increase investment flows into infrastructure projects
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Govt sets up NIIF to increase investment flows into infrastructure projects

The finance ministry has appointed IIFCL as investment adviser to NIIF and IDBI Capital Market Services as an adviser to NIIF Trustee initially for six months and one year respectively

A file photo of finance minister Arun Jaitley. The finance ministry intends to appoint the fund’s CEO by end January as well as to tie-up with one or two big investors to invest into NIIF. Photo: Hemant Mishra/MintPremium
A file photo of finance minister Arun Jaitley. The finance ministry intends to appoint the fund’s CEO by end January as well as to tie-up with one or two big investors to invest into NIIF. Photo: Hemant Mishra/Mint

New Delhi: Aiming to increase investment flows into infrastructure projects, the government on Tuesday set the proposed National Investment and Infrastructure Fund (NIIF) rolling.

In the first meeting of the governing council of NIIF after the fund was registered as a category II alternative investment fund with the Securities and Exchange Board of India (Sebi) on Monday, the broad road map for future activities of the fund were discussed.

“Since this was the first meeting, a lot of early formalities had to be completed, particularly, in relation to the formation of the fund, the registration of the fund under different legislations as required, the initial appointment of advisers to the fund, the registration of the fund with the Sebi. All these formalities were completed today," finance minister Arun Jaitley told reporters after the meeting.

Economic affairs secretary Shaktikanta Das said the finance ministry intends to appoint the fund’s CEO by end January as well as to tie-up with one or two big investors to invest into NIIF.

“The selection process of CEO of NIIF Ltd is underway. The search-cum-selection committee (SCSC) formed under the chairmanship of economic affairs secretary for appointing the CEO has already met twice. Advertisement is also being published in foreign business newspapers shortly to get global response. The SCSC is expected to meet in the middle of January, 2016 to take a view in the matter," a statement by finance ministry said. The finance ministry on 11 December invited applications for the CEO.

The members of the governing council of NIIF who attended the meeting on Tuesday include State Bank of India (SBI) chairperson Arundhati Bhattacharya, investment banker Hemendra Kothari and former Infosys Ltd board member T.V. Mohandas Pai apart from the finance minister, economic affairs secretary and financial services secretary.

The finance ministry has appointed India Infrastructure Finance Co. Ltd (IIFCL) as investment adviser to NIIF and IDBI Capital Market Services Ltd as an adviser to NIIF Trustee Ltd initially for six months and one year respectively.

“There was reasonable amount of discussion with regard to the possible projects that could be taken up for support because this fund is a major initiative of the government in supporting infrastructure," Jaitley said.

The government has budgeted to contribute 20,000 crore to the fund in the current fiscal year while another 20,000 crore is expected to be raised through sovereign wealth funds.

Jaitley said several sovereign funds and pension funds across the world have expressed their willingness to participate and cooperate in various manners with the NIIF. “The progress with regard to the suggestions that have come from Singapore, UAE (United Arab Emirates), UK and Russia in particular were discussed. There are discussions with several funds from other countries also which are going on," he added.

A finance ministry official said sovereign wealth funds keen to invest in NIIF include Abu Dhabi Investment Authority, Russian Direct Investment Fund, Singapore’s Government Investment Corporation and Temasek. “Finance ministry is currently examining the draft memorandum of understandings (MoUs) sent by these funds. There is also a proposal for NIIF to invest in a separate renewable energy fund where these sovereign wealth funds could also invest," he said, speaking under condition of anonymity.

Jaitley said the governing council will be meeting again in March to review the progress of participation of “each one of these funds which are intending either to directly invest in the fund or into other arms of the fund which will be created for supporting various infrastructure projects."

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Published: 29 Dec 2015, 07:13 PM IST
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