NEW DELHI: The Beijing-based Asian Infrastructure Investment Bank (AIIB) announced on Monday an equity investment of $100 million in India’s National Investment & Infrastructure Fund (NIIF) to help various development projects in this country.
The amount will be for the Phase I of NIIF’s Fund of Fund (Eds: Correct) initial closing and the AIIB is considering another $100 million in Phase II for the final closing, bringing the bank’s total commitment to $200 million, an official announcement said here.
The NIIF is a collaborative investment platform for international and domestic investors keen on investing in commercially viable Indian infrastructure projects. The NIIF’s Fund of Fund will anchor or invest in funds managed by fund managers with good track records in various infrastructure and associated sectors in India.
Some of the focus sectors include: Green Infrastructure, Mid-Income and Affordable Housing, Infrastructure Services and Allied Sectors, the AIIB said. The NIIF Fund of Funds recently announced its first investment – Green Growth Equity Fund – which will invest in renewable energies, clean transportation, water, sanitation and waste management.
The AIIB will provide its expertise to enhance NIIF’s environmental and social risk management capabilities to improve and monitor ecological and social performance across the portfolio investments.
“Our investment in the NIIF reflects AIIB’s commitment to support the Government of India in its efforts to promote investment in infrastructure and to mobilize private capital for development,” said AIIB Vice-President and Chief Investment Officer D.J. Pandian.
The AIIB Director-General of Investment Operations, Dong-Ik Lee, said the NIIF will provide access to a diversified range of sub-funds and trigger a multiplier effect in attracting capital.
“With AIIB’s investment in the NIIF, we will help pool commitments from long-term investors such as multilateral institutions, sovereign wealth funds, pension funds and insurance companies within and outside India to make investments in the country’s infrastructure sector,” Lee said.
With a total project portfolio of $4.4 billion, India is the largest borrower of AIIB’s lending since the bank started its operations two-and-a-half-years ago. With 86 members, including from Europe, North America, East Afric and Latin America, nearly 75 per cent of the AIIB capital is from Asia.
The bank will also consider investing in projects outside Asia provided they benefit Asia and has invested in a solar power project in Egypt. Unlike most other multilateral development banks set up by advanced economies, AIIB is the first such where principal contributors are the borrowing members themselves.
The 3rd AIIB annual meeting opened in Mumbai on Monday with a focus on infrastructure, coupled with the theme of innovation and collaboration.