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NIIF and JBIC Launch $600 Million India-Japan Fund (IJF)

  • 07 Oct 2023

Recently, the National Investment and Infrastructure Fund (NIIF) teamed up with the Japan Bank for International Cooperation (JBIC) to introduce the India-Japan Fund (IJF), a $600 million collaborative initiative featuring JBIC and the Indian government as principal investors.

Key Points

  • Collaborative Fund Creation: NIIF and JBIC have joined forces to establish the India-Japan Fund (IJF), which aims to strengthen investment in environmental sustainability and low carbon emission strategies.
  • The fund reflects a shared commitment to address climate and environmental challenges and promote green investments.
  • Fund Ownership: The India-Japan Fund (IJF) is NIIF's inaugural bilateral fund, with the Indian government contributing 49% of the targeted capital and JBIC providing the remaining 51%.
  • NIIFL (National Investment and Infrastructure Fund Limited) will oversee the fund's management, while JBIC IG (a subsidiary of JBIC) will collaborate with NIIFL to facilitate Japanese investments in India.
  • Environmental Focus: The IJF is designed to focus on investments that advance environmental sustainability and reduce carbon emissions.
  • It aspires to become the preferred partner for bolstering Japanese investments in India, thereby strengthening economic ties between the two countries.
  • Strategic Milestone: The establishment of the India-Japan Fund (IJF) marks a significant milestone in the strategic and economic partnership between Japan and India.
  • The fund will actively invest in India's environmental preservation sector, including renewable energy, e-mobility businesses, and circular economy sectors like waste management and water.

About NIIF

Establishment and Purpose

  • The National Investment and Infrastructure Fund (NIIF) was established by the Indian government in 2015.
  • Its primary role is to serve as an investment vehicle for financing various types of infrastructure projects, including greenfield, brownfield, and stalled projects.

Funding Structure

  • The Indian government is a major contributor to NIIF, investing 49% of its initial corpus.
  • The remaining capital is intended to be sourced from external third-party investors, including sovereign wealth funds, insurance companies, pension funds, endowments, and similar entities.

Investment Focus

  • NIIF's mandate encompasses a broad range of sectors related to infrastructure development in India.
  • These sectors include energy, transportation, housing, water resources, waste management, and other infrastructure-related areas.

Funds Managed by NIIF: NIIF currently oversees three distinct funds, each with its specific investment objectives and strategies. These funds are registered as Alternative Investment Funds (AIF) under the supervision of the Securities and Exchange Board of India (SEBI).

Master Fund: This infrastructure-focused fund primarily targets investments in operational assets within core infrastructure sectors like roads, ports, airports, and power generation.

Fund of Funds

  • Managed by experienced fund managers with a track record in India's infrastructure and related sectors.
  • Focus areas include Green Infrastructure, Mid-Income & Affordable Housing, Infrastructure services, and associated sectors.

Strategic Investment Fund

  • Registered as an Alternative Investment Fund II under SEBI.
  • Emphasis on investments in equity and equity-linked instruments.
  • Specializes in greenfield and brownfield investments in core infrastructure sectors.