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• Kerala Infrastructure Investment Fund Board

Kerala Infrastructure Investment Fund Board

The Kerala Infrastructure Investment Fund Board (KIIFB) came into existence on November 11, 1999 under the Kerala Infrastructure Investment Fund Act 1999 to manage the Kerala Infrastructure Investment Fund. The original Board was chaired by the Chief Secretary, Government of Kerala with Secretaries of key government departments and two financial experts as Members. Secretary to Government (Finance-Resources) was the Fund Manager. Now the KIIF Act has been comprehensively revised through the Kerala Infrastructure Investment Fund (Amendment) Act 2016 and the structure of KIIFB has been modified to make it a powerful body functioning as the key arm of Government for large scale infrastructure investment in the State. Besides enabling various modes of financial support to projects, the amendment also provides for utilising the new infrastructure fund mobilisation structures approved by SEBI and RBI. As per the amended Act, the structure of the Board is as given in Table 5.26.

The Board also has an Executive Committee. The details are given in Table 5.27. Of the above independent Members of the Board, Prof. Sushil Khanna, Sri. Salim Gangadharan and Sri. J.N. Gupta have been appointed as the independent Members in the Executive Committee. Dr. K.M. Abraham CFA IAS, is the present Chief Executive Officer of KIIFB.

A separate wing in the Government Finance Department, namely Finance (Infrastructure) Department has been established as the Administrative Department of KIIFB and the wing functions along with KIIFB.

KIIFB will function as the key Special Purpose Vehicle (SPV) for mobilising and channelling the funds to the various infrastructure SPVs. KIIFB through its well organised and professional approach will act as the main arm of Government to facilitate planned, hassle-free and sustained development of both physical and social infrastructure ensuring all round wellbeing and prosperity in the State. The minimum total project size is required to be above 100 crore. Both social and physical infrastructure projects are considered for investment, for setting a parallel pace of rapid social and economic development in all sectors. KIIFB will harness its resources through multiple investment avenues which include modern investment structures such as Infrastructure Investment Trust (In VIT), Infrastructure Debt Fund (IDF), Alternative Investment Fund (AIF); financial instruments such as General Obligation Bonds, Land Bonds, and Infra Bonds, etc.; tailor-made investment packages through existing government financial agencies like Kerala State Financial Enterprises Ltd. (KSFE); grants, annuities and other guaranteed payments from Government; returns from investments, loans from domestic/bilateral/multilateral financial institutions, etc.

In the Revised Budget Speech for 2016-17 and the Budget Speech for 2017-18, the Government had announced a total of 92 infrastructure projects worth 24,192 crore and 23,251 crore respectively for implementation through KIIFB. Government has also (i) issued the detailed guidelines for the conception, preparation and submission of KIIFB projects, (ii) fixed the rates and conditions of payment of centage charges applicable with reference to KIIFB funded projects and (iii) issued the procedure and format of the Tripartite Agreement to be signed between the SPV, the Public Agency and KIIFB. Besides transferring 2,498.42 crore towards the seed capital corpus of KIIFB to leverage borrowings from the financial market, the Government has so far transferred 281.43 crore towards the share of Motor Vehicle Tax and 448.1 crore towards the cess on petroleum products. Government has sanctioned 210 crore as share of Motor Vehicle Tax and 165 crore as share of Cess on Petroleum Products towards the first installment of the due share for 2017-18. The amounts will be transferred shortly to KIIFB. The seed capital corpus is maintained in a non-interest bearing account in the government treasury and the other amounts are deposited in various fixed deposits as the off-take of funds by the projects is yet to commence.

For the fast track approval of projects and for hassle-free fund release, KIIFB has, with the assistance of the National Informatics Centre, put in place comprehensive online project submission and payment systems called the Direct Payment System (DPS). Since its re-constitution in 2016, the General Body of KIIFB Chaired by the Hon’ble Chief Minister has met four times. So far KIIF Board has approved a total of 144 projects/sub-projects for a total outlay of 9281.56 crore. The action for implementing the projects is in progress. The number and total outlay of projects approved by KIIFB is given in Table 5.28.