UEF and WIEF eye $33 bn sovereign wealth fund investments for Tamil Nadu

Tamil Nadu Infrastructure Fund made its first close of $350 million

United Economic Forum (UEF) Chamber of Commerce and World Islamic Economic Forum (WIEF) aim to attract 1 per cent of all sovereign wealth fund Investments into Tamil Nadu. This would amount to $33 billion. This comes after Tamil Nadu Infrastructure Fund declared its first close with a total fund of $350 million.  

Speaking at the opening ceremony of the WIEF-UEF Chennai Roundtable 2018, Tamil Nadu's Deputy Chief Minister O Panneerselvam said Tamil Nadu is ready to receive such a big volume of investments. He added the state has already identified over 200 infrastructure projects that require investments worth around $250 billion.   

The Deputy Chief Minister said that Tamil Nadu has institutional structures such as sovereign wealth funds and Sharia-compliant funds that can receive investments.

The state has established the Tamil Nadu Infrastructure Fund (TNIF) which is the first Category-I Alternative Investment Fund established by any state government under SEBI regulations. 

TNIF provides equity and structured finance infrastructure projects that have a revenue model. Tamil Nadu has also received Sebi's approval to launch the Tamil Nadu Shelter Fund for investments in affordable housing. 

It is a social impact fund to that would help investors achieve social and environmental benefits apart from making a profit. Being a first of its kind fund venture in the state, it has received a seed investment of Rs 1.50 billion as catalytic first loss capital from Tamil Nadu Housing Board (TNHB).

Both the funds are professionally managed and have Tamil Nadu Infrastructure Fund Management Company (TNIFMC) as their fund manager. TNIFMC has worked with government agencies and private promoters to identify projects in the area of industrial water, industrial parks, green-energy and allied projects. 

The first round of funding has been raised from local and international investors. 

"Government, as a promoter, has ensured in-built checks and balances, to ensure the independence of decision making and alignment of interests of the management team with the fund’s success," said the Deputy Chief Minister.

He added Tamil Nadu ranks first among all States in terms of the number of factories and industrial workers. For the second year in a row, Tamil Nadu has maintained its position in the Public Affairs Index - 2017 as the state with the best governance.

Panneerselvam said the state has a high quality of human resources. To make Tamil Nadu India’s innovation hub and knowledge capital, more investments are required in value-added service industries, research and development, financial technology.