The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi has given its approval to the proposal for equity infusion by Government of Rs 6000 crores in NIIF Debt Platform sponsored by National Investment and Infrastructure Fund (NIIF), comprising of Aseem Infrastructure Finance Limited (AIFL) and NIIF Infrastructure Finance Limited (NIIF-IFL), subject to the following 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.
NIIF will take all necessary steps to use the equity investments from Domestic and Global pension funds and sovereign wealth funds expeditiously.
This was one of the twelve key measures made by Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman, as part of Government of India’s stimulus to the economy, under AatmaNirbhar Bharat 3.0 on 12th November, 2020.
The NIIFStrategic Opportunities Fund has set up a Debt Platform comprising an NBFC Infra Debt Fund and an NBFC Infra Finance Company. NIIF through its Strategic Opportunities Fund (‘NIIF SOF’) owns a majority position in both the companies and has already invested ~ Rs.1,899 crore across the Platform. The Strategic Opportunities Fund (SOF fund) through which the NIIF investment has been made will continue to support the two companies apart from investing in other suitable investment opportunities. The current proposal seeks GOI investment directly 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.
Implementation strategy and targets:
The strategy is AIFL will predominantly focus on under construction / greenfield / brownfield assets with less than one year of operations. NIIF Infrastructure Debt Financing Platform will have its own in-house appraisal system, which will enable faster deployment of funds.
NIIF IFL (NBFC-IDF) will operate as a take-out vehicle for mature operating assets. It will help infrastructure investors in replacing high cost bank finance with cheaper IDF finance post-commissioning. Over the next 5 years (NIP Plan Period), NIIF Infrastructure Debt Financing Platform can potentially support the construction of infrastructure projects worth ~ Rs.100,000 crore.
The Platform will also need to raise external long-term equity capital as well as debt from both domestic and international markets over the next few years which could result in a multiplier of 14 -18 times of the proposed capital infusion of up to Rs. 6,000 crore from GOI
.
NIIF will make strong efforts to use the equity investments by Government to catalyse equity investments by Domestic and Global Pension, Insurance and Sovereign Wealth Funds in the NIIF Infrastructure Debt Financing Platform.
Expenditure involved:
Rs 6,000 crores will be invested as equity in the NIIF Debt Platform over two financial years, i.e., 2020-21 and 2021-22.
Impact:
NIIF Infrastructure Debt Financing Platform is expected to contribute nearly Rs 1 lakh crores in debt to the infrastructure sector over the next 5 years. This will act as a catalyst in attracting more investments into the infrastructure sector as envisaged in National Infrastructure Pipeline.
This process will also help relieve exposure of banks to infrastructure projects and free up space for new green-field projects. Strengthening the IDF / take-out financing space in the infrastructure sector will support enhance liquidity of infrastructure assets and lower the risks.
In India, infrastructure projects are executed through SPVs. Typically, the SPVs on a standalone basis would find it challenging to get investment grade rating, even after the completion of construction. It is also expected that the Debt platform will raise debt from the Bond market and serve as a trusted intermediary. AIFL is rated AA by Care ratings and NIF-IFL is rated AAA by Care Ratings and ICRA. Bond investors seek lowers margins than banks, but prefer to invest in debt of AAA / AA rated entities, to meet their own risk management guidelines. Long term bond investors including Pension and Insurance Funds typically invest in bonds rated AAA.
It is expected that well-capitalized, well-funded and well-governed NIIF debt Platform can play a major role in infrastructure financing and development of Bond Market in India by acting as a AAA/AA-rated intermediary between the bond markets and infrastructure projects and companies.
Background:
As per the National Infrastructure Platform (NIP), 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. This would require at least Rs 60 to 70 lakh crores in debt financing. This current environment requires well-capitalized specialized infrastructure focused financial institutions, such as the ones being developed by National Investment and Infrastructure Fund (NIIF), which can focus on lending across the project life cycle with a strong capital base and expertise driven approach.
Shri Shripad Yesso Naik, Minister of State (IC), for AYUSH chaired an e-event organized by the National Medicinal Plant Board on 24th November, 2020 to celebrate its Establishment Day. On this occasion, a “Status Report of NMPB 2020” and “Ayur-veg” e-book were also released.
The AYUSH Minister, Secretary (AYUSH) Vaidya Rajesh Kotecha and other members of the Board complemented NMPB for its progress, achievements and contribution made for growth and development of medicinal plants sector in the country.
In recent years cultivation of medicinal plants has started gaining momentum. However, still a significant part of our requirements continue to be met from wild sources. To meet increasing demand for medicinal plants, the NMPB focuses on in-situ & ex-situ conservation and augmenting local medicinal plants and aromatic species of medical significance. The NMPB promotes research & development, capacity building through trainings, raising awareness through promotional activities like creation of Home/School herbal gardens.
NMPB’s main objective is the development of medicinal plants sector through developing a strong coordination between the stakeholders i.e., farmers, traders, and manufacturers benefiting each of them. The endeavor would increase the income and livelihood of the farmers and tribes. It would facilitate backward integration with the industry/ manufacturers through post-harvest management. Introduction of new IT tools and market linking activities further help the farmers as well as the industry.
The importance of medicinal plants to the development of India’s farm sector was one of the points highlighted on the Foundation Day. It is widely accepted that medicinal plants are critical and strategic because medicines are key to maintaining a healthy population that drives and sustains the economy. However, the immense value addition that medicinal plants can bring about to the farm sector, even to small and marginal farmers, is often overlooked. Advocacy and motivation have been high on the agenda of NMPB, and it has driven and sustained adoption of medicinal plants on a large scale. Encouraging investors in the area of cultivation and production scale medicine have also been looked into by the Board.
Amidst the surge of global statistics revealing the growing economic importance of medicinal plants for developing countries and the increasing focus of the Central Government in India on medicinal plants as an important option for enhancing farm incomes, the National Medicinal Plants Board (NMPB) has completed two decades of its existence.
It was 24th November 2000, that the then Department of AYUSH joined hands with the Ministry of Environment and Forest, Department of Scientific and Industrial Research, Department of Biotechnology and Department of Agricultural Research and Education to form the National Medicinal Plants Board (NMPB). The Board, today, is an integral unit of the Ministry of AYUSH with the aforesaid Ministries and Departments offering consultations and support, and it exercises oversight on medicinal plants sector.
The voluntary Certification Scheme for Medicinal Plants Production (VCSMPP) has been an important achievement of NMPB. The scheme, designed with the support of the Quality Council of India, encourages good practices among farmers in the matter of cultivation, field collection and maintaining quality of the medicinal plants products. This certification is, in many ways, a form of quality assurance, and it has resulted in easy marketing and export of medicinal plants products.
The NMPB has reached out to thousands of farmers across the country through Fairs, Exhibitions, Species-specific campaigns etc., and supported them through various business development steps. These steps include digital solutions like e-HERBS (for geo-tagging and collecting field data) and the e-Charak mobile app (for market information). NMPB has executed projects in areas of relevance for the farmers, like sustainable harvesting, intercropping and post-harvest management. Export promotion is another area in which it has made significant contributions.
The NMPB reaches out to farmers and traders through a regional as well as state-wise networking through the state and regional representations. Each state is having a State Medicinal Plants Board (SMPB) while there are seven Regional Cum Facilitation Centres (RCFCs) to co-ordinate between the SMPBs and NMPB.