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CCEA approves Rs 15,000-crore FDI proposal of Anchorage Infrastructure Investment Holding

The government approved a Rs 15,000-crore foreign direct investment (FDI) proposal. The proposal is for infrastructure investment from Anchorage Infrastructure Investment Holding Ltd, a subsidiary of a Canadian pension fund. Cabinet Committee on Economic Affairs (CCEA) accepts the FDI proposal for investment in infrastructure and construction-development industries.

Transport and logistics, as well as downstream investment in the airport sector and aviation-related industries and services, may be among them.

ccea members

According to an official statement, the transaction also comprises the transfer of a stake of Bangalore International Airport Limited to Anchorage. And Rs 950 crore investment by the 2726247 Ontariao Inc in Anchorage Infrastructure Investment Holding Ltd. The 2726247 Ontariao Inc is a wholly-owned subsidiary of OAC, which is the administrator of OMERS. It is one of Canada’s largest defined benefit pension plans.

What are the benefits involved.

The investment will provide a significant boost to the infrastructure and construction industries, as well as the airport industry. It will boost the Indian government’s ambition to construct world-class airports and transportation infrastructure through private partnerships. CCEA is headed by the prime minister of India. It is a group of members in which many ministers work on detailed demands for grants and the outcome budget.

CCEA

The investment will also provide a major boost to the recently announced National Monetisation Pipeline (NMP). It will help fund leasing out of state-owned infrastructure assets to private operators. This includes assets such as highways, trains, airports, sports stadiums, power transmission lines, and gas pipelines.

According to a statement from Anchorage Infrastructure Investment Holding Ltd., The company is planning to invest downstream in several of the sectors covered by the NMP.

The statement adds, that the investment will also result in direct job creation. Since the sector in which Anchorage Infrastructure Investment Holding Ltd proposes to make downstream investments are capital- and employment-intensive. Moreover. the investment will also create indirect jobs in the construction and related industries.

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Infra Push: No ownership transfer under Rs 6 lakh-crore asset monetization plan

The Narendra Modi government unveiled a National Monetization Pipeline (NMP) on Monday. The policy aims to generate upfront revenues of Rs 6 lakh crore from operational infrastructure projects; over the next four years, beginning in FY22.

monetization

The decision is part of a plan to quickly return to fiscal consolidation and build the fiscal funds. These funds are necessary to finance the Rs 111-lakh-crore National Infrastructure Pipeline and other capital-intensive projects. The objective is to encourage private infrastructure investment by making public funds accessible to match private contributions.

The monetization plans to work through a structured contractual partnership as opposed to privatization or slump sale of assets. The assets include Highway lengths, electricity transmission networks, freight routes, airports, ports, gas pipelines, and warehousing facilities.

The Niti Aayog’s NMP is noteworthy in that it entails the monetization of rights rather than ownership. At the completion of the transaction life, the assets must be returned to the government or the relevant public body. Because brownfield, “de-risked” assets will be available, the government believes that private investors and global patient capital will be eager to invest in them.

niti ayog

In late March, the government passed legislation to establish a development finance institution (DFI). This will act as a catalyst for funding projects under the National Infrastructure Pipeline. Renaming of DFI to the National Bank Financing Infrastructure and Development (NaBFID) is in process.

Moreover, the National Bank Financing Infrastructure and Development (NaBFID), is about to launch. The government anticipates that the NaBFID will raise up to Rs 3 lakh crore over the following five years, leveraging the proposed initial capital of Rs 20,000 crore. The government will initially control 100% of the DFI, but as more investors join, it is willing to reduce its ownership to 26%.

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Nirmala Sitharaman to launch National Monetization Pipeline on Aug 23

According to an official release, Finance Minister Nirmala Sitharaman will launch the National Monetization Pipeline (NMP) on Monday. The National Monetisation Pipeline will identify the government’s infrastructure assets for auction over the next four years.

finance minister- monetization pipeline

On Sunday, the Niti Aayog stated that the NMP is a four-year pipeline of brownfield infrastructure assets from the central government. In addition to offering clarity to investors, NMP will act as a medium-term roadmap for the government’s asset monetization initiative.

The Finance Minister made a number of key statements about asset monetization in the Union Budget for 2021-22. Moreover, she emphasized that the government is searching for innovative ways to raise funds.

monetisation pipeline

Why do we need National Monetization Pipeline (NMP)?

The NMP aims to attract more foreign investors and encourage alternate financing for infrastructure assets.

Sitharaman stated in her Budget speech that monetizing operating public infrastructure assets was a crucial financing option for new infrastructural development. The government will establish a National Monetisation Pipeline of potentially monetizable brownfield infrastructure assets. A dashboard for asset monetization will also be built to track progress and provide visibility to investors.

finance minister to launch national monetization pipeline

The government views asset monetization as a strategy for infrastructure enhancement and maintenance, instead of only a funding mechanism. According to Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey. The government is finalizing Rs 6 lakh crore worth of infrastructure assets for monetization. This includes national highways, mobile towers, stadia, railway stations, and electricity grid pipes.

“A national monetization plan of roughly Rs 6 trillion is in the process,” Pandey said. He also mentioned that it will include assets such as pipelines, electricity grid pipes, national highways, ToT (toll-operate-transfer), and so on. The launch of the NMP book will be in the presence of Niti Aayog Vice Chairman Rajiv Kumar and Niti Aayog CEO Amitabh Kant. As well as, the Secretaries of relevant ministries whose assets constitute the monetization pipeline.

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