AIIB puts $150m in IFC Emerging Asia Fund

The Beijing-based multilateral is making its second fund investment in the $1bn private equity vehicle, which will support growth in developing Asian countries.

The Asian Infrastructure Investment Bank has approved a $150 million equity investment in the International Finance Corporation’s Emerging Asia Fund.  

The IFC Emerging Asia Fund, with a target size of $1 billion and a 10-year life, aims to make equity and quasi-equity investments to build a diversified portfolio of assets across the developing parts of Asia. 

Currently led by Saadia Khairi and Andrew Yee, from World Bank affiliate IFC Asset Management Company, the vehicle targets key markets including China and India, as well as south and Southeast Asian nations.   

AIIB noted that the investment will only be deployed into the bank’s member countries. It also expects to provide further capital through co-investments with both the Emerging Asia Fund and the IFC.

The fund reached its first close in August last year, securing a $200 million investment from the IFC, $50 million from the Fiji National Provident Fund, the country’s largest financial institution, and an undisclosed sum from the Korea Development Bank. 

The AIIB commitment to the IFC Emerging Asia Fund follows another $150 million investment in June in an India-focused infrastructure fund, a $750 million vehicle which is reportedly managed by Morgan Stanley Infrastructure. That was the first equity investment made by the Beijing-based multilateral. 

The bank is also considering a $200 million commitment to India’s National Investment and Infrastructure Fund, a quasi-sovereign vehicle looking to attract international institutional capital to fund the country’s infrastructure development. 

Separately, the AIIB is providing a $100 million loan to co-finance a transmission system project with the Asian Development Bank. The project will see the installation of five transmission lines across south India to ensure a reliable electricity supply in the region. 

Since its operations started in 2016, the AIIB has approved $3.59 billion in financing for 21 projects across 11 countries, 16 of which are co-financed with other multilateral development institutions.