Singapore: Temasek & Abu Dhabi fund in talks with India’s NIIF for investments

Photo: Reuters

India’s National Investment and Infrastructure Fund (NIIF) is in advanced talks with Singapore state investor Temasek Holdings and Abu Dhabi Investment Authority (ADIA) for investments and is also close to finalising a significant deal.

The Financial Express reported this development, citing sources familiar with the matter.

According to one source, in the report, Temasek Holdings managing director (India) Promeet Ghosh met senior Indian finance ministry officials earlier this month to discuss planned investments in the infrastructure sector.

ADIA is reportedly in discussions to make capital commitments estimated to be from $5-10 billion.

Industry sources cited by Financial Express indicate that Temasek is likely to commit about $1 billion to the fund. Temasek’s current asset base in India is estimated at $10 billion, with Indian investment constituting 5 per cent of its S$270 billion ($198.9 billion) global portfolio.

Earlier this year, New Delhi entered into MoUs with the Qatar Investment Authority and Russia’s Rusnano OJSC for investments under the NIIF framework. In addition, it launched the Green Growth Equity Fund to attract private sector investment from the UK to finance green infrastructure projects in India, with an agreement to anchor investments up to £120 million ($157.3 million) each in the joint fund.

Funds for Indian infrastructure from private equity players, sovereign wealth funds (SWFs) and other institutional investors have risen in importance; most public sector banks in India are dealing with a heavy burden of non-performing loans (NPLs), limiting their capacity to finance large infrastructure projects.

The NIIF was established by New Delhi as a fund of funds with an aim to generate risk-adjusted returns for its investors alongside promoting infrastructure development and technology India.

The NIIF and its sub-funds are supposed to invest in infrastructure projects, with an initial corpus of 400,000,000,000 rupees ($6.2 billion) to fund greenfield, brownfield and stalled infrastructure projects. According to New Delhi, 49 per cent will be backed by the government, with 51 per cent to be raised from SWFs, other global long-term investors and public-sector units.

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