Infrastructure

Adia part of fund aiming to raise $4bn for India upgrade

September 5, 2024

Workers are working on the construction of a bridge over the Brahmaputra River in Guwahati, India, on July 23, 2024. Indian Finance Minister Nirmala Sitharaman is presenting her seventh consecutive Budget today. (Photo by Anuwar Hazarika/NurPhoto)NO USE FRANCE — Workers construct a bridge over the Brahmaputra River in Guwahati, India. Infrastructure investments worth $1.4 trillion are planned by 2025

Abu Dhabi is one of backers
Backed by Abu Dhabi’s ADIA
Spending on infrastructure expected

The National Investment & Infrastructure Fund (NIIF) in India, which is backed by Abu Dhabi, is aiming to raise $4 billion, according to reports.

The fund, which counts the Abu Dhabi Investment Authority (Adia), the Indian government, AustralianSuper and Singapore’s Temasek Holdings among its investors, is raising the money in the early part of next year to pay for infrastructure upgrades across the country.

India’s infrastructure sector is poised for strong growth, with investments worth $1.4 trillion planned by 2025 under the National Infrastructure Pipeline.

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NIIF’s previous “master fund” closed in December 2020 with $2.3 billion. The new fund is expected to be much larger and will be led by a new chief executive.

A report from Bloomberg quoted an anonymous source saying that NIIF plans to raise capital for its private markets fund.

NIIF expects to collect more capital as co-investment commitments from its backers in this fundraise, the report said.

Adia, the UAE’s largest sovereign wealth fund, has invested extensively in India, buying stakes in companies across multiple sectors including energy, real estate, telecoms, retail and food manufacturing.

At a national level, the UAE is the seventh-largest investor in India, with an estimated investment of $18 billion. A comprehensive economic partnership agreement (Cepa) was signed between the two countries in 2022.

However, untapped trade opportunities between India and the Middle East, North Africa and Turkey could be worth more than $112 billion, research from HSBC published in February said.

That was picked up on by Sridhar Iyengar, chief financial officer of Mubadala’s Aerospace, Renewables and Information Communications Technology business, who said reducing red tape is critical to making India more attractive to global investors.

Speaking at an India-UAE Business Forum in Abu Dhabi in May, Iyengar said Mubadala, which has invested about $8 billion in India, experienced delays in its infrastructure and renewable projects.

In 2023 the sovereign wealth fund, along with other partners, invested in Tata Power Renewable Energy and Cube Highways Trust, an infrastructure investment trust in India.

“I had to make personal calls to the UAE ambassador to India, and the Indian ambassador to UAE, and they had to work behind the scenes to make things happen at a faster pace,” Iyengar said.

“Now, if that is what a sovereign wealth fund [faced], think about non-government companies that want to bring investment.”

Foreign direct investment in India is growing – $71 billion was recorded in the 2022-23 financial year and $33 billion in the first six months of the current financial year.