The proposal was portion of the Atma Nirbhar Bharat three. package announced on November 12.
To catalyse debt funding of infrastructure projects, the Cabinet on Wednesday authorized a proposal to infuse Rs six,000 crore in the debt platform of the National Investment and Infrastructure Fund (NIIF) more than two years. The capital infusion is anticipated to allow the two NIIF-sponsored incorporated entities to raise Rs 1 lakh crore in debt more than 5 years. The NIIF will also attempt to rope in equity investors – domestic and worldwide pension, insurance coverage and sovereign wealth funds – in the debt platform, which could additional its leveraging capability.
Of course, provided the fiscal constraints, only Rs two,000 crore of the proposed capital will be infused in the two entities – AIFL and NIIF-IFL – in the present fiscal the balance quantity will be offered in FY22. The proposal was portion of the Atma Nirbhar Bharat three. package announced on November 12.
“NIIF Infrastructure Debt Financing (IDF) platform… will act as a catalyst in attracting more investments into the infrastructure sector as envisaged in National Infrastructure Pipeline (NIP),” the government mentioned. Under the NIP, investments to the tune of Rs 111 lakh crore is envisaged in several infrastructure sub-sectors more than the subsequent five years. This would demand at least Rs 60-70 lakh crore in debt financing.
Operationalisation of the debt platform will assistance relieve exposure of banks to infrastructure projects and absolutely free up space for new green-field projects. “Strengthening the IDF/take-out financing space in the infrastructure sector will support enhance liquidity of infrastructure assets and lower the risks,” the government mentioned.
The approach is that AIFL will predominantly concentrate on beneath building /greenfield / brownfield assets with significantly less than 1 year of operations. The IDF platform will have its personal in-home appraisal program, which will allow more rapidly deployment of funds. NIIF IFL, on the other hand, will operate as a take-out car for mature operating assets. It will assistance infrastructure investors in replacing higher expense bank finance with more affordable IDF finance post-commissioning.
The NIIF Strategic Opportunities Fund (NIIF SOF) has set up a Debt Platform comprising an NBFC Infra Debt Fund and an NBFC Infra Finance Company. NIIF by way of its NIIF SOF owns a majority position in each the organizations and has currently invested about `1,899 crore across the platform. The Strategic Opportunities Fund (SOF fund) by way of which the NIIF investment has been created will continue to help the two organizations apart from investing in other appropriate investment possibilities.