NIIF launches $600 million IJ Fund as anchor investors

Utkarsh Classes Last Updated 28-02-2024

NIIF launches $600 million IJ Fund as anchor investors

Agreements and MoU 5 min read

National Investment and Infrastructure Fund (NIIF) launched the $600 million India-Japan Fund (IJF) with the Government of India and Japan Bank for International Cooperation (JBIC) as Anchor Investors.

NIIF has partnered with JBIC to launch a $600 million IJF with JBIC and the Government of India as Anchor Investors.
This joint initiative signals a major dimension of cooperation between the two countries in a shared priority area, namely climate and environment.

Govt. of India and JBIC will have stakes of 49% and 51% respectively:

This announcement marks NIIF's first bilateral fund in which the Government of India will contribute 49 per cent of the target fund and the remaining 51 per cent will be contributed by JBIC.
The fund will be managed by NIIF Limited (NIIFL) and JBIC IG (a subsidiary of JBIC) will assist NIIFL in enhancing Japanese investments in India.

The fund will be used to achieve environmental sustainability by:

The India-Japan Fund will focus on investing in environmental sustainability and low carbon emissions strategies and aims to serve as the 'partner of choice' to further increase Japan's investment in India.
The formation of the India-Japan Fund marks an important achievement in the strategic and economic partnership between the Government of Japan and the Government of India.

What is the National Investment and Infrastructure Fund (NIIF)?

It is a government-backed joint investment platform established in 2015 to meet India's long-term infrastructure needs.
It manages three types of funds namely Master Funds, Fund of Funds and Strategic Funds.
NIIF invests across a range of asset classes such as infrastructure, private equity and other industries with the aim of generating excellent risk-adjusted returns for its clients.
NIIF has been created to raise capital from both national and international sources due to constraints in the domestic banking sector.

What is an anchor investor?

An anchor investor is an institutional investor who participates in a company's IPO. An anchor investor provides stability to any IPO as far as pricing is concerned.
In the year 2009, Securities Exchange Board of India (SEBI) started the concept of anchor investor. Anchor investors are also called "Cornerstone Investors".

Partnership between India and Japan:

Both countries share a common vision on regional security, economic development and strategic interests. But over the years, this relationship has evolved into a strategic partnership, with both countries cooperating on various fronts including defence, security, trade, investment and technology.
In the current geopolitical scenario, the Indo-Pacific region has emerged as the focal point of global attention and India and Japan are at the forefront of efforts to maintain stability in the region.
The Indo-Pacific is the confluence of the Indian Ocean and the Western Pacific Ocean. The region is one of the world's largest economic centers with major sea routes and maritime trade routes such as the Strait of Malacca.
It is also home to nine of the world's ten busiest ports, with approximately 60 percent of the world's maritime trade passing through the region.
India and Japan's common stance on the rules-based order makes them natural partners in maintaining peace and stability in the region.