National Investment and Infrastructure Fund (NIIF)

National Investment and Infrastructure Fund (NIIF) is a fund created by the Government of India for enhancing infrastructure financing in the country. It is different from the National Investment Fund.

NIIF was proposed to be set up as a Trust, to raise debt to invest in the equity of infrastructure finance companies such as Indian Rail Finance Corporation (IRFC) and National Housing Bank (NHB). The initiative took shape in the hope that infrastructure finance companies could leverage the extra equity, manifold, which implies that NIIF is a banker of the banker of the banker.

In accordance with the operational framework approved on August 20, 2015, NIIF is not a single entity as it can be one or more Alternate Investment Funds (AIF) under SEBI Regulations.

Its creation was announced in the Union Budget 2015-16. NIIF came into force after it was registered with SEBI as Category II Alternative Investment Fund (AIF) on December 28, 2015.

The objective of the Fund is to maximize economic impact mainly through infrastructure development in commercially viable projects, both green-field and brown-field, including stalled projects. It could also consider other nationally important projects, for instance in manufacturing, if found commercially viable.

Among the major functions of NIIF are-fund raising through suitable instruments including off-shore credit enhanced bonds, and attracting anchor investors to participate as partners; servicing the investors; approving potential companies/institutions/projects (including State entities) for investments; investing in the corpus created by Asset Management Companies (AMCs) for investing in private equity and preparing a shelf of infrastructure projects and providing advisory services.

A redeeming feature of NIIF is that will enjoy full autonomy for project selection. It formulates guidelines and follows due processes for selection criteria for AMCs and Non-Banking Financial Companies (NBFCs)/Financial Institutions (FIs).

In a major forward move, NIIF signed a Memorandum of Understanding (MoU) with RUSNANO of Russia on February 2, 2016 to set up the Russia-India High Technology Private Equity Fund for joint implementation of investments into projects in India In a major recognition for it, Financial Times (London) adjudged NIIF as the ‘Most Innovative Structure’ in Asia Pacific under the Finance category.