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Cabinet okays Rs 6K equity infusion into NIIF Debt Platform

IANS | November 25, 2020 04:53 PM

NEW DELHI:The Union Cabinet on Wednesday approved the equity infusion of Rs 6, 000 crore by the Centre in the NIIF Debt Platform, sponsored by the National Investment and Infrastructure Fund.

It comprises of Aseem Infrastructure Finance Ltd and NIIF Infrastructure Finance Ltd.

The government will infuse the amount into the NIIF over 2 years, out of which Rs 2, 400 crore will be infused in the current financial year.

The NIIF will take all necessary steps to use the equity investments from domestic and global pension funds and sovereign wealth funds expeditiously, said an official statement.

As part of efforts to provide proper funding to infrastructure projects, the government earlier this month announced to infuse Rs 6, 000 crore equity in NIIF Debt Platform.

The NIIF Strategic Opportunities Fund had set up a Debt Platform comprising of an NBFC Infra Debt Fund and an NBFC Infra Finance Company. The platform has a loan book of Rs 8, 000 crore and deal pipeline of Rs 10, 000 crore.

With the fresh infusion of equity by the government and finance, including NIIF's own equity infusion of Rs 2, 000 crore and further equity from the private sector, the debt platform is expected to raise enough resources to extend debt support of Rs 1, 10, 000 crore to projects by 2025.

NIIF AIFL (AA rating) and IFL (AAA rating) will raise Rs 95, 000 crore debt from market, including project bonds.

"By 2025, it will provide infra project financing of Rs 110, 000 crore, " a government statement had said.

The NIIF Strategic Opportunities Fund has set up a Debt Platform comprising an NBFC Infra Debt Fund and an NBFC Infra Finance Company. The NIIF, through its fund, owns a majority position in both the companies and has already invested Rs 1, 899 crore across the platform.

The fund, through which the NIIF investment has been made, will continue to support the two companies apart from investing in other suitable investment opportunities. The current proposal seeks government investment directly to further scale the potential and impact of the two entities in the infrastructure debt financing space.

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