• INFRASTRUCTURE FUNDS

UNIT 9 & 10 – INDUSTRY AND INFRASTRUCTURE – PART 14

Infrastructure Funds:

  1. Global Infrastructure facility (2004)
  1. Launched by World Bank
  2. Facilitates the preparation and structuring of complex infrastructure PPPs of enable mobilization of private sector and institutional investor capital.

   iii.    To help emerging economics and developing countries.

  1. National Investment Fund: (2005)
  1. The amount received from disinvestment was transferred to this fund to finance various social sector schemes, projects, PSB recapitalization.
  2. It is kept out of the consolidated fund of India.
  1. India Infrastructure project Development Fund: (2007)

        Set up in Dept. of Economic Affairs with Rs.100 crores to help PPP projects.

  1. National Investment and Infrastructure Fund: (2015)

National Investment and Infrastructure Fund Limited (NIIFL) is a collaborative investment platform for international and Indian investors, anchored by the Government of India. NIIFL invests across asset classes such as infrastructure, private equity and other diversified sectors in India, with the objective to generate attractive risk-adjusted returns for its investors.

NIIF Limited manages over USD 4.4 billion of equity capital commitments across its three funds – Master Fund, Fund of Funds and Strategic Opportunities Fund, each with its distinct investment strategy. NIIF Master Fund primarily invests in operating assets in core infrastructure sectors such as transportation and energy. 

NIIF Fund of Funds invests in funds managed by best-in-class fund managers focused on some of the most dynamic sectors in India such as climate infrastructure, middle-income & affordable housing, digital consumer platforms and other allied sectors. NIIF Strategic Opportunities Fund is a Private Equity fund which aims to build scalable businesses across a range of opportunity long but capital short sectors.

It was set up at Rs.40, 000 crore fund to provide long term capital for Infrastructure project. Out of the 49% Government stake, remaining private (51%). SEBI registered NIIF as category II alternative Investment Funds.

  1. India Infrastructure Fund (IIF)

India Infrastructure Fund (IIF) is a SEBI-registered domestic venture capital fund focused on long-term equity investments in a diversified portfolio of infrastructure projects. IIF has been sponsored by IDFC Limited (IDFC), along with Citigroup Inc. (Citi) and India Infrastructure Finance Company Limited (IIFCL) as founder investors. 

National Infrastructure Pipeline:

  • Aim: To achieve the GDP of $5 trillion by 2024-25, India needs to spend about $1.4 trillion (Rs. 100 lakh crore) over these years on infrastructure. Hence it is necessary to step-up annual infrastructure investment so that lack of infrastructure does not become a binding constraint on the growth of the Indian economy.
  • Hon’ble Prime Minister in his Independence Day-2019 speech highlighted that Rs.100 lakh crore would be invested on infrastructure over the next five years including social and economic infrastructure projects.
  • To achieve this objective, a Task Force was constituted to draw up the National Infrastructure Pipeline (NIP) for each of the years from FY 2019-20 to FY 2024-25 with the approval of the Finance Minister. 
  • The Task Force is chaired by Secretary, DEA with CEO (NITI Aayog), Secretary (Expenditure), Secretary of the Administrative Ministries, and Additional Secretary (Investments), DEA as members and Joint Secretary (IPF), DEA as Member Secretary.
  • NIP will enable a forward outlook on infrastructure projects which will create jobs, improve ease of living, and provide equitable access to infrastructure for all, thereby making growth more inclusive.
  • NIP includes economic and social infrastructure projects.
  • On the basis of the information compiled as on date, total project capital expenditure in infrastructure sectors in India during the fiscals 2020 to 2025 is projected at over Rs 102 lakh crore.
  • During the fiscals 2020 to 2025, sectors such as Energy (24%), Roads (19%), Urban (16%), and Railways (13%) amount to around 70% of the projected capital expenditure in infrastructure in India.
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