Abu Dhabi Investment Authority, India’s Infrastructure Fund Ink $1 billion Deal

The Abu Dhabi Investment Authority (ADIA) signed an agreement worth $1 billion with the National Investment and Infrastructure Fund (NIIF) of India to facilitate the flow of foreign capital for infrastructure development in the country. ADIA, one of the largest sovereign wealth funds in the world, will become the first institutional investor in NIIF’s Master Fund and a shareholder in National Investment and Infrastructure Limited, the NIIF’s investment management company, the two companies announced on Oct. 16.

“We are proud to have ADIA as our founding partner, and grateful for its support and contributions to date, and we now look forward to announcing further agreements with other investors,” Sujoy Bose, the chief executive officer of NIIF, said, adding that the agreement paves the way for creating significant economic impact through investment in commercially viable infrastructure development projects. The collaboration with ADIA aims to develop an investment structure that is attractive to international investors as well as aligned with NIIF’s objectives.

Besides the Indian government and the AIDA, six other domestic institutional investors — HDFC Standard Life Insurance, HDFC Asset Management, Housing Development Finance Corp, ICICI Bank, Kotak Mahindra Old Mutual Life Insurance and Axis Bank — will also join the NIIF Master Fund. NIIF is a collaborative investment platform sponsored by the Government of India for international and Indian investors. The stake of the government in NIIF is 49 per cent, an attempt to make it attractive to sovereign wealth funds, as well as multilateral and bilateral investors.

While NIIF will target a corpus of Rs 40,000 crore, the government has promised to invest Rs 20,000 crore to the fund.

Khadem Al Rumaithi, the executive director of Real Estate & Infrastructure Department at Adia, said: “As a long-standing investor in India and in infrastructure globally, Adia welcomes the opportunity to be the first to partner with NIIF in a platform that is sure to be of interest to other long-term institutional investors.”

“In parallel, ADIA will also continue to consider and pursue investments into Indian infrastructure opportunities that fall outside the scope of the NIIF, including taking minority stakes in high-quality Indian companies alongside aligned and reputable partners,” he added.

ADIA has been investing funds on behalf of the Government of Abu Dhabi, and has invested in equities, fixed income and real estate in India, to create long-term value. It manages a global investment portfolio diversified across over 20 asset classes and sub-categories, and has invested $350 million in the renewable energy companies, ReNew Power and Greenko, in India.