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Cabinet approves Rs 6,000 cr infusion in NIIF debt platform

Cabinet approves Rs 6,000 cr infusion in NIIF debt platform

The Union Cabinet approved the government’s capital infusion of Rs 6,000 crore in the National Investment and Infrastructure Fund (NIIF) over two years.

“The cabinet took an important decision for Rs 6,000 crore of capital infusion in the National Investment and Infrastructure Fund in next two years,” said Prakash Javadekar, union minister of information and broadcasting, during a briefing on Wednesday.

Under the NIIF, two firms, Aseem Infrastructure Finance Limited (AIFL) and NIIF Infrastructure Finance Limited (NIIF-IFL) will mobilise the funds, the minister said.

While AIFL will finance under construction green field and brown field projects with less than a year of operations, NIIF-IFL will finance mature operating assets by helping infrastructure investors to replace high cost bank finance with cheaper finance post-commissioning, according to an official statement.

The Centre, who’s investment will go into the NIIF’s strategic opportunities fund, has allocated Rs 2,000 crore for the current fiscal, the statement said.

“However, in view of the unprecedented financial situation and availability of limited fiscal space due to the prevailing Covid-19, the proposed amount may be disbursed only if there is readiness and demand for debt raising,” it said.

NIIF-IFL is a AAA rated company while AIFL was AA rated. The NIIF debt platform will put in Rs 7,000 crore equity while about Rs 1 lakh crore will be mobilised through global bond markets to make Rs 1.1 lakh crore available for infrastructure projects in the first tranche, Javadekar said.

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