MoU with UAE on NIIF fund infusion likely

In a major breakthrough for the newly-created National Investment and Infrastructure Fund (NIIF) — which the NDA government had formed in December 2015 to finance infrastructure projects and revive stalled ones with a corpus of Rs 40,000 crore — the United Arab Emirates has evinced interest in infusing funds in it.

According to highly-placed sources, a MoU between India and UAE for mobilising long-term investment in NIIF may happen soon, as the government is keen to get the Cabinet’s approval for the proposal “as soon as possible”.

After the signing of the MoU between the two nations, international pension funds as well as sovereign funds from the UAE will be able to put in funds in NIIF.

Companies from the UAE will be able to put in funds in NIIF, which could be used for diverse sectors like civil aviation, real estate, defence, roads & highways, among others, sources said.

Within three months of its creation, UAE is the second nation after Russia which has shown interest in NIIF.

Last month, NIIF had signed an MoU with Rusnano OJSC of Russia. As per the guidelines of the agreement, both NIIF and Rusnano will cooperate in diverse sectors and facilitate high-technology investments in India.

Both NIIF and Rusnano have agreed to set up the Russia-India high technology private equity fund for joint implementation of investments into projects in India.

Rusnano is a Russian development institute which wants to invest in projects in the field of high technologies and defence, including the projects aimed at establishment of manufacturing industrial enterprises in India.

NIIF has a corpus of Rs 40,000 crore, where the government’s share is Rs 20,000 crore while the remaining Rs 20,000 crore is to be put in by private investors, including international pension and sovereign funds.

Finance minister Arun Jaitley had indicated earlier that NIIF would serve as an umbrella fund with several funds underneath it. There could be many alternate funds functioning under it, like the ones for infrastructure projects, energy projects etc, he had said.