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Economic Times
10-07-2025
- Business
- Economic Times
NIIF to make a $700-million first closure of $1 billion Private Markets Fund II
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The National Investment and Infrastructure Fund NIIF ), a quasi-sovereign investment manager backed by the Centre, is set to complete a $700-million first closure of its latest Private Markets Fund (PMF II) within the next month, according to sources familiar with the initial close marks a significant increase compared with the debut fund, PMF I, which raised $600 million in week, the New Development Bank (NDB), a Shanghai-based multilateral development bank established by the BRICS nations—Brazil, Russia, India, China, and South Africa—committed $100 million to PMF II. The Asian Infrastructure Investment Bank (AIIB), which had backed PMF I, also reaffirmed its support with a $125 million commitment in government will remain the single largest investor in PMF II, contributing 49% of the total first reported in April last year about the launch of $1-billion PMF Private Markets Fund is dedicated to supporting India-focused private equity and venture capital funds. With a target size of $1 billion, PMF II aims to invest across key growth sectors, including electric vehicle (EV) infrastructure, waste management, urban and social infrastructure, technology, manufacturing, and their associated supply the structure of PMF I, PMF II plans to build a diversified portfolio comprising approximately 15 funds as well as direct investments in companies. About 75% of the fund's capital will be allocated to growth and venture capital funds, with the remaining 25% invested directly into Indian enterprises, added its inception, PMF I has deployed $600 million across 60 companies through nine portfolio funds. It has backed notable funds such as Multiples PE (owned by Renuka Ramnath), Lighthouse India, Invascent, Eversource Capital, Somerset Healthcare, Arpwood Partners, Yournest Capital Advisors, HDFC Capital Advisors, and Amicus Capital year, GoI had appointed Sanjiv Aggarwal as Chief Executive Officer & Managing Director. Agarwal, a former Partner at UK's infrastructure fund Actis, replaced Sujoy Bose, first managing director & chief executive officer of Private Markets Fund is headed by managing partner Anand Unnikrishnan, who joined NIIF in 2018. Prior to joining NIIF, Anand was a senior member of Macquarie Infrastructure and Real Assets (MIRA) team in India for about 10 contacted, an NIIF spokesperson declined to NIIF manages over $4.9 billion in equity commitments across four distinct funds: the Master Fund (infrastructure), Private Markets Fund (fund of funds), Strategic Opportunities Fund (growth equity), and India-Japan is also launching its Master Fund II in a couple of months, targeting a commitment of about $4 investor base comprises a diverse group of sovereign wealth funds, pension funds, multilateral development banks, and government counterparts. Prominent backers include the Abu Dhabi Investment Authority (ADIA), Singapore's Temasek, Australian Super, Ontario Teachers' Pension Plan, Canada Pension Plan Investment Board (CPPIB), Asian Infrastructure Investment Bank (AIIB), Asian Development Bank (ADB), New Development Bank (NDB), and the Japan Bank for International Cooperation (JBIC).
Time of India
10-07-2025
- Business
- Time of India
NIIF to make a $700-million first closure of $1 billion Private Markets Fund II
The National Investment and Infrastructure Fund ( NIIF ), a quasi-sovereign investment manager backed by the Centre, is set to complete a $700-million first closure of its latest Private Markets Fund (PMF II) within the next month, according to sources familiar with the development. This initial close marks a significant increase compared with the debut fund, PMF I, which raised $600 million in 2019. This week, the New Development Bank (NDB), a Shanghai-based multilateral development bank established by the BRICS nations—Brazil, Russia, India, China, and South Africa—committed $100 million to PMF II. The Asian Infrastructure Investment Bank (AIIB), which had backed PMF I, also reaffirmed its support with a $125 million commitment in May. The government will remain the single largest investor in PMF II, contributing 49% of the total capital. ET first reported in April last year about the launch of $1-billion PMF II. Live Events The Private Markets Fund is dedicated to supporting India-focused private equity and venture capital funds. With a target size of $1 billion, PMF II aims to invest across key growth sectors, including electric vehicle (EV) infrastructure, waste management, urban and social infrastructure, technology, manufacturing, and their associated supply chains. Mirroring the structure of PMF I, PMF II plans to build a diversified portfolio comprising approximately 15 funds as well as direct investments in companies. About 75% of the fund's capital will be allocated to growth and venture capital funds, with the remaining 25% invested directly into Indian enterprises, added sources. Since its inception, PMF I has deployed $600 million across 60 companies through nine portfolio funds. It has backed notable funds such as Multiples PE (owned by Renuka Ramnath), Lighthouse India, Invascent, Eversource Capital, Somerset Healthcare, Arpwood Partners, Yournest Capital Advisors, HDFC Capital Advisors, and Amicus Capital Partners. Last year, GoI had appointed Sanjiv Aggarwal as Chief Executive Officer & Managing Director. Agarwal, a former Partner at UK's infrastructure fund Actis, replaced Sujoy Bose, first managing director & chief executive officer of NIIF. The Private Markets Fund is headed by managing partner Anand Unnikrishnan, who joined NIIF in 2018. Prior to joining NIIF, Anand was a senior member of Macquarie Infrastructure and Real Assets (MIRA) team in India for about 10 years. When contacted, an NIIF spokesperson declined to comment. Overall, NIIF manages over $4.9 billion in equity commitments across four distinct funds: the Master Fund (infrastructure), Private Markets Fund (fund of funds), Strategic Opportunities Fund (growth equity), and India-Japan Fund. NIIF is also launching its Master Fund II in a couple of months, targeting a commitment of about $4 billion. NIIF's investor base comprises a diverse group of sovereign wealth funds, pension funds, multilateral development banks, and government counterparts. Prominent backers include the Abu Dhabi Investment Authority (ADIA), Singapore's Temasek, Australian Super, Ontario Teachers' Pension Plan, Canada Pension Plan Investment Board (CPPIB), Asian Infrastructure Investment Bank (AIIB), Asian Development Bank (ADB), New Development Bank (NDB), and the Japan Bank for International Cooperation (JBIC).
Japan Forward
03-07-2025
- Business
- Japan Forward
India and Japan's Blueprint for Sustainable Growth
In a move to expedite decarbonization efforts while reducing clean energy costs in India, Japan and India are finalizing a Joint Crediting Mechanism (JCM). This bilateral framework will enable both nations to exchange emission reduction credits, supporting Japan in fulfilling its climate commitments. Japan's goal of achieving net-zero by 2050 and India's 45% emissions reduction target by 2030 highlight the natural partnership between the two countries in decarbonization and economic growth. Japanese companies are increasingly interested in entering the Indian market as a relocation destination for production bases or as an investment opportunity. Therefore, this article explores the potential of partnerships in the carbon market sector. Under the JCM, Japanese companies will invest in and deploy advanced carbon reduction technologies in India. In return, Japan will receive carbon credits that can offset its emissions or be traded within its national carbon market. The initiative falls under Article 6.2 of the Paris Agreement, which ensures internationally recognized and verifiable emissions reductions. Once finalized, carbon credits will be officially registered and tracked. Joint committees will be formed to oversee project implementation and to verify credit issuance through the formulation of a detailed report. Consequently, this mechanism will assist both countries in meeting their nationally determined contributions (NDCs) under the Paris framework. A wide range of sectors, including solar thermal energy, green hydrogen, and sustainable aviation fuel (SAF), are expected to benefit from JCM investments. Originally initiated by Japan, the JCM facilitates the transfer of technical expertise and climate-friendly technologies from developed to developing countries. Developed nations benefit by outsourcing their emissions reductions, often at a lower cost. Meanwhile, this supports sustainable development in host countries. It helps mobilize international finance, alleviating the cost burden for the recipient country. Currently, Japan has established similar agreements with 11 other countries, including Indonesia, Kenya, and Vietnam. India and Japan had been discussing a JCM partnership since 2014. In 2023, a $600 million fund was jointly launched by India's quasi-sovereign wealth fund, the National Investment and Infrastructure Fund (NIIF), and the Japan Bank for International Cooperation (JBIC) to invest in sustainable projects. JBIC contributed 51% of that total, while the remainder came from India. The fund aimed to invest in sustainable projects in areas such as e-mobility, renewable energy, and waste management. Other key initiatives, such as the Perform, Achieve, and Trade (PAT) scheme, have facilitated a long-standing India-Japan collaboration in energy efficiency. This partnership has reduced 10 million tons of CO2 emissions, saved 25 million tons of oil equivalent energy, and generated $10 billion in investments. Prime Minister Shigeru Ishiba (second from left) and Indian PM Narendra Modi (third from left) attend a working lunch at the G7 and Outreach Partners Meeting. Climate was a big topic at the meeting. June 18, 2025 (Courtesy of the Government of Canada) For a country like India, which is vulnerable to climate change, adopting clean technologies is both essential and urgent. Achieving low or zero carbon emissions necessitates access to these technologies. However, such technologies often come with high upfront costs. This may exceed what the governments of developing countries can currently fund. They are typically expensive or not widely available. For example, generating electricity from coal is cheaper than using green hydrogen or solar thermal power, despite the environmental cost. In this context, Japan's role becomes critical. It helps to equalize the cost of clean energy with conventional, polluting sources by subsidizing these technologies. Today, problems such as a severed supply chain, amid an unstable global situation, have aligned both countries' efforts and broader climate ambitions to build effective carbon markets. Coal continues to dominate India's power mix due to its lower capital costs. However, with Japanese subsidies, alternatives such as energy storage systems and solar thermal plants could become economically viable, thereby accelerating India's energy transition. It has the potential to transform India's energy sector by improving the competitiveness and affordability of renewable energy technologies. Beyond emissions cuts and costs, the JCM has the potential to generate jobs in both nations by fostering investments in low-carbon technologies. Furthermore, it promises to drive economic growth by creating skilled jobs. India can strategically channel these funds into underdeveloped clean energy sectors, leveraging Japanese expertise to expedite its transition to a low-carbon economy. This aligns with India's dual goals of sustainable development and economic expansion. Meanwhile, Japanese companies gain access to a rapidly growing market for clean technologies. The initiative is likely to strengthen India-Japan strategic ties, complementing their collaboration in infrastructure, defense, and economic security. It also counterbalances China's growing regional influence, having a ripple effect on different domains of collaboration. However, the ultimate goal is for India to adopt and scale these technologies independently, making JCM a high-stakes and high-impact partnership. India is poised to introduce its long-awaited carbon market by 2026. The market for the sale and purchase of carbon credits does not currently exist in our country. Under this program, those who use fossil fuels or emit carbon would have to buy carbon credits, while those who use power from non-fossil sources would receive carbon credits that they can sell in the market. The introduction of carbon credits should incentivize manufacturers to adopt green energy solutions, reducing carbon emissions and enhancing compliance with global regulations. India's strong potential in green hydrogen, energy efficiency, waste management, and biogas reaffirms Japan's commitment to supporting these initiatives. There have been significant roadblocks to warming India-Japan relations in the climate domain. Negotiations with India have been ongoing since 2014, highlighting the complexity of such high-stakes climate agreements. Challenges also remain in ensuring that emissions reductions are not double-counted. This will be crucial to upholding the mechanism's credibility and preventing any compromise of its integrity. Additionally, there is a concern that Japan might use the JCM to delay more decisive domestic climate actions. Critics argue that developed countries should prioritize cutting emissions at home first, as it feeds into domestic political debate on climate. However, supporters of the mechanism contend that international cooperation through frameworks like the JCM facilitates faster and more cost-effective global progress toward climate goals. Long-term sustainability is another critical issue. India must ultimately develop the capability to adopt and scale these technologies independently. This will require not only funding but also knowledge transfer, training, and the development of infrastructure. Without such capacity-building, the JCM risks becoming a short-term fix rather than a foundation for lasting transformation. India must cultivate the ability to sustain and expand these technologies over time. India is the world's third-largest GHG emitter, primarily due to its coal and industrial activities. Similar JCM partnerships, such as those in Vietnam, have already achieved measurable CO2 reductions in key sectors. A similar trajectory can be expected for India by targeting high-emission areas with solutions like sustainable aviation fuel and green hydrogen. Although the exact emissions reduction targets under the India-Japan JCM have yet to be disclosed, the potential is significant. The Japan-India JCM could serve as a global blueprint for climate cooperation if implemented effectively. It has the potential to reduce the cost of climate action, accelerate technology transfer, and strengthen diplomatic ties. This should help both nations move closer to their climate goals. Technological options include the potential of green ammonia, hydrogen, and solar energy in industrial transformation. Carbon dioxide removal technologies are also highlighted as important. There is a need for technology transfer, financing, and strategic partnerships to boost sustainability efforts. Both nations are committed to climate action. Through innovative technologies and strong policy frameworks, they can create mutually beneficial pathways toward decarbonization. Japan's approach to carbon markets aligns well with India's sustainability goals. Its commitment to strengthening investment ties with India through the JCM framework, which promotes energy security and a low-carbon future, is well-timed. By aligning sustainability objectives with strategic interests, this partnership can show how developed and developing countries can collaborate meaningfully to address one of the most significant challenges of our time. Author: Varuna Shankar
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Business Standard
26-06-2025
- Business
- Business Standard
Aseem Infra to raise ₹2,500 crore in FY26, reduce bank funding share
Aseem Infrastructure Finance Ltd (AIFL), a unit of the government-backed National Investment and Infrastructure Fund (NIIF), plans to raise about ₹2,500 crore from the debt market, including external commercial borrowings (ECBs), in FY26. It aims to incrementally increase market borrowings and reduce the share of bank funding from 75 per cent to 60 per cent. Virender Pankaj, chief executive officer, Aseem Infrastructure Finance Ltd, told Business Standard that the institution intends to increase the share of market borrowings from the current 25 per cent to 40 per cent. This will include both domestic and international sources such as ECBs, pension funds, and insurance funds. AIFL also plans to raise borrowings from multilateral agencies like the World Bank. 'It was a bit expensive, but now with currency stabilising and the interest rate trajectory trending downward, it will become more economical,' he added. This week, the company raised $80 million as a green loan through external borrowings from DBS Bank. As on 31 March 2025, AIFL's total borrowings stood at ₹13,272 crore. This comprised a mix of term loans (80.2 per cent), non-convertible debentures (10.4 per cent), and commercial paper (9.4 per cent). Its gearing stood at 4.1 times as of March 2025, compared to 3.9 times in March 2024. Rating agency ICRA, in a May 2025 review, said it expects AIFL to operate at a managed gearing of under five times on a steady-state basis. On credit growth, Pankaj said the loan book is expected to grow by about ₹3,000 crore in FY26. The institution will focus on enhancing the share of green finance, targeting an increase from the current 50 per cent to 60 per cent this year. AIFL's loan book stood at ₹15,156 crore as on 31 March 2025 and is expected to grow at a compounded annual growth rate (CAGR) of approximately 15–20 per cent over the medium term, according to ICRA. To support the loan book expansion, AIFL may also pursue another round of capital infusion. 'For growth, we will need it. So yes, in the next two years, we will look to raise capital,' Pankaj said. The firm will look at tapping institutional sources such as private equity and multilateral agencies. It last raised ₹317 crore in equity in March 2022 from Japanese financial services firm SMBC. NIIF, through its Strategic Opportunities Fund, holds a 59 per cent stake, the Government of India holds 31 per cent, and SMBC holds 10 per cent. AIFL's capital adequacy ratio (CAR) stood at 17.7 per cent as of March 2025. AIFL had earlier raised ₹1,287 crore through two rounds of capital infusions by NIIF in January and May 2020. This was followed by approximately ₹947 crore from NIIF (₹132 crore) and the Government of India (₹815 crore) in March 2021, and ₹317 crore from SMBC in March 2022. Its CAR stood at 17.7 per cent in March 2025.
India Gazette
20-06-2025
- Business
- India Gazette
"Ward-level accountability is key...": MoHUA Additional Secy D Thara
New Delhi [India], June 20 (ANI): As India braces for an influx of 70 million new urban residents over the next two decades, government officials and industry leaders are calling for a strategic pivot in the country's urban development narrative--from rebuilding to revitalisation. 'Infrastructure must be delivered--if the private sector can do it better, let them,' said D Thara, Additional Secretary, Ministry of Housing and Urban Affairs, said. She was delivering the keynote address at a CII conference on Exploring Urban Dynamics: Outlook 2030' held in the capital on Friday. There is a disconnect between India's economic ambitions and the capacities of its urban local bodies, Thara said, urging the private sector to be proactively engaged in the urban development of the country. This becomes even more important as urban India is set to see an estimated 70 million new urban residents in the next two decades by 2045. This poses challenges and opportunities as the country will see the creation of many more cities, calling for a pragmatic, revitalisation-first approach to urban development. She underlined the need for targeted interventions to upgrade existing cities, backed by significant investment. The proposed Urban Challenge Fund, she explained, is intended to catalyse this transformation with a mix of 25 per cent public sector seed funding, 50 per cent market capital, and 25 per cent state contribution. 'It's not about building afresh,' she said, 'it's about fixing what already exists--legacy infrastructure, greenfield areas, and urban governance systems.' Prasad Gadkari, Executive Director & Chief Strategy Officer at NIIF, echoed the importance of enabling frameworks to unlock capital. 'A robust pipeline of projects, predictable revenue streams, and standardised bidding processes are essential,' he said, noting NIIF's readiness to back urban infrastructure initiatives through scalable public-private partnerships. Abedalrazq Khalil, Practice Manager for Urban and Land at the World Bank, placed India's urbanisation in global perspective. 'By 2050, 800 million people are expected to live in Indian cities. Cities must be enablers of growth--but many are not yet ready.' He emphasised the need for integrated planning and livability as critical to attracting private investment. Transport integration also featured prominently, with the Regional Rapid Transit System (RRTS) cited as a model for enabling distributed urban employment. In-situ slum redevelopment and smaller-scale, private-led urban initiatives were also discussed as vital components of revitalisation. The conversation repeatedly returned to the need for local capacity. 'Ward-level accountability is key,' said Thara, pointing to the need for institutional support to empower smaller municipalities to tap funds such as those managed by NIIF. Regulatory enablers, including those supporting Transit-Oriented Development and flexible work models, were also cited as tools for urban regeneration. Sriram Khattar, Co-Chair, CII National Committee on Real Estate and Housing, noted that urban PPPs, once uncertain, have now gained credibility. Dr Debolina Kundu, Director of NIUA, added that effective urban governance, capacity building, and low-carbon infrastructure would be essential pillars of India's urban strategy to 2050. (ANI)
