By Prasad Gadkari, Chief Strategy Officer & Saurabh Suneja, Director, National Investment and Infrastructure Fund
India’s economic landscape is rapidly transforming, driven by a strong push in infrastructure development. India’s GDP is expected to grow at 7 per cent plus this year — ensuring its place as one of the world’s best performing economies. Robust infrastructure development is a key catalyst for India’s growth, supercharged by various Government of India (GoI) programmes across sectors.
NIIF’s funds
Since starting operations in January 2017, NIIF has made significant strides towards its mandate of maximising economic impact in a commercially sustainable manner. Currently NIIF manages approximately $4.9 billion across four funds. NIIF has attracted interest from prominent global sovereign funds, pension funds, multilateral institutions, and bilateral development institutions.
NIIF has been creating differentiated fund strategies to channel various pools of capital into important growth themes in India. A recent example is the India-Japan Fund (IJF), set up in October 2023 with a corpus of $600 million. The IJF has GoI and JBIC as core investors; the fund invests in companies across sectors that focus on environmental preservation. It also seeks to facilitate collaborations between Indian and Japanese companies for investment in India across sectors. NIIF is also in the process of setting up a credit fund for investing in the green transition space.
Investments across key economic sectors NIIF’s investments are currently focused across four broad themes:
Sustainable infrastructure: with a focus on building and operating projects in core infrastructure.
Private equity: both direct and indirect, with diversified exposure aimed at fostering entrepreneurship and driving value creation for the Indian economy.
Climate investments: focusing on growth investments in climate change and energy transition.
Credit products (first one under way for green transition).
Through its platforms in the ports and logistics space, in partnership with DP World, NIIF is now one of the largest players in this segment, with a ~23 per cent share of container terminal volumes and ~12 per cent share in container EXIM logistics. NIIF’s logistics platform, Hindustan Infralog Private Limited (HIPL) has 19 facilities (11 MMLPs, two FTWZs, five cold chain locations and one contract logistics warehouse) and owns and operates over 30 container train sets. Through its ports sector platform, it has recently won the rights to develop the greenfield Tuna Tekra Port in Gujarat at an estimated project cost of ~Rs 70 billion. Its existing portfolio includes five container terminals.
NIIF’s wholly owned roads platform Athaang, has a portfolio of five road assets and operates over 1,100 lane km. Two of these road assets are in Jammu and Kashmir. To date, NIIF has financed about 6,500 lane km of highway projects through its debt platforms. NIIF has become the first domestic institutional investor to have a presence in India’s airport development space. It has partnered with GMR Group to invest in two greenfield airports in Mopa and Bhogapuram.
Through its renewable energy platform, Ayana Renewable Power, NIIF plays a key role in India’s transition towards renewable energy. Ayana has a portfolio of over 5 GWs, including operational and under-development projects. NIIF has also conceptualised and anchored investment in the largest single-country climate fund in Emerging Markets, along with the Foreign, Commonwealth & Development Office (UK) – the about $741 million Green Growth Equity Fund (GGEF), which has investments across energy transition, waste management, e-mobility, water treatment, and green financing. NIIF’s debt platforms have financed renewable energy projects with a cumulative capacity of over 10 GW, helping avoid more than 15 million tonnes of CO2 emissions.
NIIF has forayed into the e-mobility space through multiple investment and funding strategies. It has invested in Ather Energy, a leading electric two-wheeler manufacturer. Since NIIF’s investment, Ather has increased its manufacturing capacity from 110,000 scooters to 400,000 scooters per annum. NIIF’s IJF recently made its first investment – in Mahindra Last Mile Mobility Limited (MLMML), one of the leading players in electric three-wheelers, marking another significant investment in sustainable mobility. Through its private markets’ investee entity, Greencell Mobility, NIIF supports a pan-Indian network of close to 1,600 e-buses, enabling zero-emission mass transportation for public transit. NIIF’s debt platform has sanctioned two EV projects for supporting the acquisition/running of 745 e-buses in UP and Delhi. Other portfolio entities in this space include Lithium Urban Technology and TI Clean Mobility. Exponent Energy, another one of NIIF’s private markets’ portfolio companies, is pioneering a fast-charging technology that can fully charge an electric vehicle in 15 minutes, with the entire technology stack developed in India.
NIIF has also enabled several investments in the social and urban infrastructure space. Through two of its funds, NIIF has supported nine companies in the healthcare space. Through its investment in HCARE-2 (an affordable housing-focused fund), NIIF has supported the development of ~77,000 housing units across 21 projects.
Through its portfolio entity – EverEnviro, NIIF has also supported the development of the largest municipal waste to compressed biogas (CBG) project in South Asia. This project in Indore has a waste intake capacity of about 550 TPD of waste and shall produce ~15 TPD of biogas. EverEnviro is also developing 17 agri-waste to CBG projects in North India, including projects based on paddy waste in Punjab.
Alongside core infrastructure sectors, NIIF has also made significant investments in the digital infrastructure space. It has anchored a smart meter infrastructure platform, Intellismart, in a joint venture with Energy Efficiency Services Limited. Intellismart is the first mover and one of the industry leaders in the smart metering PPP space. NIIF’s data centre platform, in partnership with Digital Edge, is setting up a 300 MW hyperscale facility in Navi Mumbai over a 47-acre site; this shall be India’s largest single-location data centre with an estimated development cost of $2 billion. Another key initiative in the digital space was a $200 million investment in iBus in in March 2024. iBUS is a leader in in-building connectivity solutions, outdoor small cells and managing institutional Wi-Fi services.
NIIF has built an infrastructure debt platform through controlling stakes in NIIF Infrastructure Finance Limited and Assem Infrastructure Finance Limited. In the last four years, the NIIF infrastructure debt platform has become the largest infrastructure debt provider in the private sector (outside of banks). The companies together have an outstanding loan book of about Rs 340 billion across over 200 infrastructure assets located across over 15 states in India.
NIIF collaboration with the government on its strategic priority areas
One of the envisaged roles of NIIF is to provide strategic advisory to the government – both central and states. Given NIIF’s overall positioning, it works closely with the Department of Economic Affairs and other government departments/state governments on new projects, investments and policy ideas. NIIF has closely worked with NHAI on the structuring of the initial road TOT initiatives as well as developing the financing model for the Delhi-Mumbai Expressway. NIIF is also acting as a financial adviser to MEITY for the India Semiconductor Mission (ISM) and assisting IN-SPACe in accelerating private investment in the space sector .
NIIF also acts as a bridge between GoI and international institutional investors. NIIF periodically undertakes workshops and thought leadership initiatives that assist in enhancing the engagement between government departments and institutional investors, thereby boosting private investment in new projects.
NIIF’s continued role in India’s economic development
Funds deployed by NIIF have been able to create a catalytic, multiplier impact. To date, NIIF has made investments across 21 portfolio platforms/JVs/funds, and through these, NIIF has supported investments in over 100 distinct companies and significant infrastructure assets/projects in India. In alignment with the national priorities of green growth, infrastructure investment and inclusive development, NIIF aims to continue playing an important role in India’s development journey by attracting and channelising global capital into critical areas of the Indian economy.
