NIIF, bankers may meet this week to discuss stalled projects

New Delhi: The National Investment and Infrastructure Fund (NIIF) is likely to meet bankers this week to examine if it can extend last-mile funding to stalled infrastructure projects that have turned toxic for want of funds. The last-mile funding will help get them off the ground, a senior finance ministry official said.

"We have brokered a meeting between bankers and the NIIF recently. The NIIF could finance some of the projects that have turned into NPAs due to increased costs, among other reasons, and cannot access bank credit for last-mile funding," the official said.

According to CMIE data, implementation of projects that collectively envisaged investments worth Rs 77,700 crore was stalled during the December 2016 quarter. This is 38 per cent higher than the value of projects stalled during the preceding (September 2016) quarter.

It is also more than 10 per cent higher than the average value of projects getting halted mid-way through their implementation during the past year, it said, adding that the problem continues to plague investments in India.

The fund will explore possibility to "cure the financial dilemma of otherwise completely viable projects and will be a win-win for everyone", the official said.

This will be the first such meeting and some projects too could be put up before the NIIF for consideration by the bankers, the official added.

Set up in 2015, the investment vehicle has a mandate to fund commercially viable greenfield, brownfield and stalled projects. With 49 per cent equity participation from the government, the remaining will come from the private sector. While the Centre will invest Rs 20,000 crore in the NIIF, the remaining will come from private domestic and foreign investors who can invest in the umbrella fund or smaller sector or project-specific funds within it.

It has been incorporated as a company under the Companies Act, 2013, authorised to act as an investment manager.

Last year, the government announced that it is in the process of setting up two sub-funds under the NIIF -- one in clean energy fund which will primarily focus on renewable energy, and another with focus on highway projects.

India and the UK have decided to set up a 500 million pound fund, with both governments together investing 240 million pound, to finance clean energy projects. While India and the UK will be the anchor investors to the 'Green Growth Equity Fund', the remaining 260 million pound has to come in from private investors.