Infra Debt Financing [NIIF]
Finance Minister Nirmala Sitharaman’s targeted measures announced via a comprehensive stimulus package on Thursday, November 12, will be a booster for the Indian economy that has been hit by the Covid-19 pandemic. The 12 areas covered as part of ‘Atmanirbhar Bharat 3.0’ across key sectors are well targeted and promise to kickstart the engines of growth in the economy by bolstering demand, investments, exports, and job creation.
Finance Minister announced new stimulus measures under which the central govt will undertake Rs 6,000 crore equity infusion in the National Infrastructure & Investment Fund (NIIF) debt platform by 2025. It will provide infrastructure project financing to the tune of Rs 1,10,000 crore. The government will invest Rs 6,000 crore as equity and the rest of the equity will be raised from private investors.
Hon'ble FM Nirmala Sitharaman said, "We are now giving Rs 6000 Crores of Equity to Debt Platform of NIIF where private equity participation will also come in. NIIF itself has invested Rs 2000 crore. So, by 2025 they will have to fund projects to the extent of Rs 1,10,000 Crores. We are creating this avenue for them to do it even through the debt market".
The NIIF Strategic Opportunities Fund has set up a debt platform comprising an NBFC Infra Debt Fund and NBFC Infra Finance Company. The platform has a loan book of Rs 8,000 crore and a deal pipeline of Rs 10,000 crore. NIIF attracts a lot of sovereign funding for investment in infrastructure activities.
IIF AIFL (AA rating) and IFL (AAA rating) will be raising Rs 95,000 crore debt from the market, including project bonds. By 2025, will provide infrastructure project financing of Rs 1,10,000 crore. NIIF has already invested nearly Rs 2,000 crore in the equity of the platform, and the govt will be investing Rs 6,000 crore as equity, with the rest being raised from private investors. Actual investments made by three NIIF funds in downstream funds, platforms and operating companies is Rs 18,676 crore.
Additionally, to shore up investment, FM also announced Rs 10,200 crore extra outlay towards capital expenditure in addition to the Rs 25,000 crore provision already made for roads, ports, and defence projects. “This will create demand for domestic defence equipment, green energy, and industrial infrastructure,” she said.