India’s quasi-sovereign fund, the National Investment and Infrastructure Fund (NIIF) on Wednesday said that it has set up a bilateral vehicle in partnership with Japan Bank for International Cooperation (JBIC), a policy-based financial institution backed by Japan’s government, to invest in India’s environmental preservation sector.
The fund was formed as part of a memorandum of understanding (MoU) between the two entities signed in November last year to make equity investments in environmental preservation and low carbon emission strategies.
The fund will have a corpus of $600 million and will invest in areas including renewable energy, e-mobility and circular economic sectors such as waste and water management.
The fund will receive a commitment of about 49% from the Indian government while the rest will be contributed by the Japan government-backed institution, according to a press statement.
“The India-Japan Fund strengthens our commitment to cooperate and invest in opportunities that address India's environmental and social requirements. We aim to establish an ecosystem that facilitates mobilising resources for financing sustainable development," said Rajiv Dhar, managing director and chief executive of NIIF.
Explaining the rationale behind the investment, Hayashi Nobumitsu, governor of JBIC said that with the unstable world situation and problems such as a severed supply chain, Japanese companies are increasingly interested in entering the Indian market as a relocation destination for a production base or an investment destination.
Currently, NIIF manages over $4.9 billion of equity capital commitments across its four funds – Master Fund, Fund of Funds, Strategic Opportunities Fund, and the India-Japan Fund.
In May, VCCircle reported that the NIIF was planning to launch its second FoF with an aim to raise around $1 billion (over Rs 8,200 crore at current exchange rates). While the firm hasn’t made any comment on its plans, a closer look at the portfolio of its maiden fund-of-funds offers a glimpse into how the NIIF’s LP bets are helping companies across sectors as varied as renewable energy and waste management to affordable housing, healthcare and technology.
