Abu Dhabi Investment Authority (ADIA), a sovereign wealth fund owned by Emirate of Abu Dhabi, has plans to invest in the Indian National Infrastructure Investment Fund (NIIF).
NIIF is currently being developed by the government of India. The fund is expected to raise Rs200 billion (US$3 billion) and the ADIA would invest a total of US$770 million in the fund.
The government of India will hold a 49 per cent stake in the fund while the remaining 51 percent interest will be offered to sovereign and quasi-sovereign wealth funds, bilateral and multilateral investors and Indian state-run companies.
It is expected that the fund will provide equity to firms that are already into infrastructure financing and will also acquire stake directly in infrastructure projects. The fund would fill the gaps in the entire infrastructure finance sector that exists at the moment in the country.
According to Manish Agarwal, Partner - Infrastructure Advisory of PwC India, NIIF should take on the role of guarantor of debt to infrastructure projects. He added in a recent interview that the fund should also take over the debt that infrastructure firms raise from banks at the construction phase.
ADIA manages the Emirate's excess oil reserves. ADIA has never published how much it has in assets but estimates have been between US$800 billion to approximately US$875 billion. The Sovereign Wealth Fund Institute puts the figure at US$773 billion.