Government tightens rules for NGOs intending to receive foreign funds
Government tightens rules for NGOs intending to receive foreign funds
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The Central government will infuse equity of Rs 6,000 crore into the National Investment and Infrastructure Fund (NIIF) Debt Platform, subject to certain conditions, the Union Cabinet decided on Wednesday.

The platform comprises of Aseem Infrastructure Finance Ltd (AIFL) and NIIF Infrastructure Finance Ltd (NIIF-IFL).

On November 12, Union Finance Minister Nirmala Sitharaman had proposed the move under the twelve key measures made by as part of the government's stimulus to the economy, under 'AatmaNirbhar Bharat 3.0'.

According to an official communique, the infusion will take place subject to certain conditions.

"That only Rs 2,000 crore would be allocated during the current year 2020-21. However, in view of the unprecedented financial situation and availability of limited fiscal space due to the prevailing Covid-19, the proposed amount may be disbursed only if there is readiness and demand for debt raising," it said.

"NIIF will take all necessary steps to use the equity investments from domestic and global pension funds and sovereign wealth funds expeditiously."

The Rs 6,000 crore will be invested as equity in the 'NIIF Debt Platform' over two financial years, 2020-21 and 2021-22.

The 'Debt Platform' comprising an 'NBFC Infra Debt Fund' and an 'NBFC Infra Finance Company' was set up by NIIF Strategic Opportunities Fund.

The NIIF, through its SOF, owns a majority position in both the companies and has already invested Rs 1,899 crore across the platform.

The current proposal sought the government's direct investment to further scale the potential and impact of the two entities in the infrastructure debt financing space.

"This will also support the efforts of the platform to raise international equity. With the fresh infusion of equity by the government, besides the equity already infused by NIIF SOF and potential equity participation from the private sector, the debt platform is expected to raise enough resources to extend debt support of Rs 1,10,000 crore to projects by 2025," the communique said.

As per the 'National Infrastructure Platform', investment in infrastructure sector is targeted at Rs 111 lakh crore over the next 5 years across various sub-sectors, creating substantial need for debt financing.

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