The proposed Investment Policy for the National Infrastructure Fund (NIF) marks a strategic shift toward sustainable infrastructure financing by establishing a rigorous framework for financial risk management and capital allocation.
Currently under review by the Parliamentary Departmental Committee on Finance and Planning, the policy sets a minimum expected return on equity of 7% and enforces strict exposure limits, capping sector-wide allocation at 40% of the Fund’s assets and individual project exposure at 20%. To shield public finances, projects must sustain a minimum 60% debt leverage through non-recourse project debt, while direct balance-sheet borrowing by the Fund is strictly prohibited to effectively manage sovereign financial risks.
Established in March as a government investment vehicle, the NIF aims to mobilize large-scale infrastructure development by blending public and private capital, reducing overall reliance on taxpayer funds and external debt. Eligible investment areas span national highways, rail networks, airports, seaports, power systems, ICT infrastructure, water reservoirs, irrigation schemes, and agribusiness facilities.
Financing will be deployed flexibly through direct investments, equity, quasi-equity, debt instruments, project finance structures, special purpose vehicles, infrastructure funds, and pooled investment vehicles.
Under this new framework, commercial viability serves as the primary benchmark, requiring all projects to demonstrate proven market demand before capital deployment. The Fund will actively drive project preparation by setting aside dedicated resources to develop proposals into bankable, investment-ready opportunities.
Governance is further strengthened by mandating independent technical and financial assessments, alongside a political independence clause designed to protect investment decisions from external influence.
Performance will be evaluated across a comprehensive five-dimensional model covering capital preservation, liquidity, income generation, project preparation efficiency, and broader socio-economic impact beyond basic financial returns. Stakeholders and members of the public have until August 24 to submit their feedback on the proposed policy.
