New Delhi : The government is considering a proposal to dilute its stake in a host of infrastructure financing institutions such as REC, PFC and IIFCL through the newly created National Investment and Infrastructure Fund (NIIF). “It is at a very preliminary stage. Among various things, the Finance Ministry is also looking at a issue if NIIF can pick up stake in state-owned entities that are into infrastructure financing,” official sources said.
A sub-fund of NIIF could pick up stake in companies like Rural Electrification Corporation (REC), Power Finance Corporation (PFC) and India Infrastructure Finance Company Ltd (IIFCL), sources said.
This will help ease pressure on the government to finance infrastructure as their holding will come down and divestment will free capital which is to be used for other purposes, sources added.
The government is in consultation with several sovereign funds and pension funds from Russia, Singapore, the UK and the UAE to participate in the NIIF registered as category II Alternate Investment Fund with a proposed series of funds. The government currently is in the process of appointing chief executive of India’s maiden sovereign wealth fund.