NIIF to start funding activities in few days: Arun Jaitley

NEW DELHI: National Investment and Infrastructure Fund ( NIIF) will start funding activities in the next few days, Finance Minister Arun Jaitley said, indicating the government’s attempt to make more funds available for infrastructure through a dedicated fund.

To begin with, the funding will start via two sub-funds of the NIIF – highways fund and clean energy fund. “The NIIF has become operational and in the next few days it will start major activities,” Jaitley said while addressing Best Practices in PPPs and Longterm Infrastructure Financing of BRICS Countries seminar here.

FM said several sovereign wealth funds have committed resources to the NIIF that will provide equity support to the infrastrucre sector, which is not easily available given the risks.

The NIIF will have a corpus of Rs 40,000 crore that will be further leveraged via multiple funds set up under it for specific sectors. The government will provideRs 20,000 crore to this fund being set up outside the public sector to give it the flexibility it needs to fund ventures involving some amount of risk.

The main fund and the feeder funds have the mandate to invest in greenfield, brownfield and stalled projects.

“We are awaiting a lot of commitments from various sovereign funds to become either contributors to the main fund itself or to the different sector of infrastructure sector itself which will go into this particular fund (umbrella fund NIIF),” FM said adding the fund will play a pivotal role in funding infrastructure.

Jaitley said infrastructure is key to growth while pointing out more initiatives in the works. These are Public Contracts (Resolution of Disputes) Bill, Guidelines for Remediating PPP Contracts, New Credit Rating system, and Credit Enhancement for Infra projects.

Economic Affairs Secretary Shaktikanta Das said there was more interest in specific, dedicated, sectoral fund rather than all-purpose, multi-sector umbrella fund.