Dubai based port infrastructure developer – DP World will invest $3 billion in India’s sovereign investment firm National Investment and Infrastructure Fund (NIIF). The firm that has operation in 40 countries will invest in ports, terminals and logistic facilities through the NIIF.
NIIF was created by Government of India to enhance foreign investment with investment participation from big institutional entities including sovereign investors.
DP World is owned by the Dubai government. The company’s investment will be in equities to acquire assets in the field of port and other logistics infrastructure.
Backgrounder: What is NIIF?
The NIIF is a trust that mobilizes funds so that it can give finance to the major infrastructure financing companies in the country. It was registered as a Category II AIF (Alternative Investment Fund) with SEBI in December 2015. Initial authorized capital of the Fund is set at Rs 20000 crore, which will be revised from time to time in accordance with the Ministry of Finance’s decision. An initial allocation of Rs 4000 crore was made under the budget 2016-17.
Both greenfield and brown field projects can be financed out of NIIF.
The structure and ownership of the NIIF is that government’s ownership in each entity set up under it will be 49%. It will not be either increased or decreased and is contributed directly by the Government.
The 49% government holding will make it like a sovereign fund with guarantee of the government and will attract foreign investors besides generating trust among the foreign investors because of sizable government ownership and management.