Chinese backing for $1bn Southeast Asia fund

The Export-Import Bank of China has set up a private equity fund with a $1bn initial target to invest in Southeast Asian infrastructure and new energy projects. The fund aims to collect $10bn over the next eight years.

A $1 billion fund to invest in Southeast Asian infrastructure and new energy projects will be majority owned by the Export-Import Bank of China (Exim Bank), which is investing $300 million. China Investment Corporation, the Chinese sovereign wealth fund, is also investing $300 million.

Exim Bank HQ

The fund is also set to receive a cornerstone commitment from the International Finance Corporation (IFC), the private investment arm of the World Bank, which will commit up to $100 million.

“We are currently in good faith discussions to explore ways to support the fund for sustainable infrastructure development in ASEAN and to commit an investment,” a spokesman for the IFC told PEI Asia.

Exim Bank will make an anchor investment of $300 million to the China-ASEAN Investment Cooperation Fund, according to IFC’s website. China’s sovereign wealth fund, CIC, is also committing $300 million to the fund, according to a report in the Wall Street Journal.

Neither Exim Bank nor CIC could be immediately reached.

Targeting ASEAN countries, the fund will focus on infrastructure-related investments in transportation facilities, public works, telecommunication networks, energy and resources. It will take both minority and majority stakes and will invest both equity and also in equity-linked instruments, according to the IFC.

The WSJ reported that Exim Bank owns a 52 percent stake in the management company formed to manage the fund, while CIC holds a 24 percent stake. In addition, IFC will gain an 8 percent stake in the management company through its participation as a cornerstone investor, according to its website.

The fund aims to raise $10 billion in total over the next eight years, Exim Bank vice president Zhu Xinqiang was quoted as saying in the WSJ.