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 the 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.
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.
NIIF currently manages three funds each with its distinctive investment mandate. The funds are registered as Alternative Investment Fund (AIF) with the Securities and Exchange Board of India (SEBI).
Master Fund: The Master Fund is an infrastructure fund with the objective of primarily investing in operating assets in the core infrastructure sectors such as roads, ports, airports, power etc.
Fund of Funds: Fund of Funds 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 & Affordable Housing, Infrastructure services, and allied sectors.
Strategic Investment Fund: Strategic Investment Fund is registered as an Alternative Investment Fund II under SEBI in India.