Citi, JP Morgan, Macquarie back Chicago infra trust

Mayor Rahm Emanuel and former President Bill Clinton unveiled a groundbreaking initiative to leverage up to $1bn from some of the industry’s biggest names to help reinvigorate Chicago’s infrastructure.

Chicago has created an infrastructure bank – known as the Chicago Infrastructure Trust – backed by some of industry’s biggest names with a view toward using private capital to support public infrastructure.

A notional outline of the nascent infrastructure bank emerged Thursday in a joint announcement from Chicago Mayor Rahm Emanuel and Bill Clinton, the 42nd president of the US.

A consortium of investors including Citibank, Citi Infrastructure Investors, Macquarie Infrastructure and Real Assets, JP Morgan Asset Management and Ullico have agreed to look at the projects the trust will be funding and evaluate their bankability. The idea is that the investors will be able to channel over $1 billion to develop Chicago’s infrastructure through the new vehicle.

“Nothing is more crucial to our long-term competitiveness and job creation than infrastructure,” said Emanuel in a press statement. The newly-created Chicago Infrastructure Trust, Emanuel went on to claim, will “stimulate public and private investment in our infrastructure”.

Former President Clinton said his experience helming his Clinton Foundation endowment fund has helped him understand the role of infrastructure in the economy: “I have seen firsthand how investment in our infrastructure can modernise our country, get people to work and improve our economic strength through energy efficiency,” Clinton said in a statement.

The trust’s first investments will be channelled to projects that form part of the city’s ‘Retrofit Chicago’ initiative – a programme aimed at streamlining the city’s energy efficiency – and will test investor appetite to help raise some $225 million of debt and equity to fund these deals.

The trust will require the approval of the city council.

Emanuel has been hinting he considered revitalising infrastructure in the Windy City a significant objective of his administration. He was a successful fundraiser for Clinton, earning a staff spot in the Clinton White House.

Prior to becoming mayor of Chicago, Emanuel, a Democrat, served as chief of staff for US President Barack Obama. 

Obama has himself made infrastructure a platform issue in his administration. His 2011 state of the union address called for the creation of a national infrastructure bank.