Thailand Future Fund seeded with $286m

The $2.8bn sovereign vehicle is set to make its maiden investments in three road projects.

The Thai cabinet has approved a THB10 billion ($286 million; €259million) seed funding for the creation of the THB100 billion Thailand Future Fund, which will initially invest in three road projects. 

The THB10 billion seed fund will be provided by the Ministry of Finance through the state-controlled Vayupak Fund, while the remaining THB90 billion will be raised from private investors, according to local reports. 

Of the THB10 billion, THB1 billion will be used to set up a close-ended mutual fund to provide a minimum guaranteed return to TFF’s investors. 

Kobsak Phutrakul, a Vice Minister for Finance, said fund investors will get a guaranteed return of two to three percent per annum while the government aims to use proceeds to invest in new and existing infrastructure projects. 

A committee set up to oversee the fund has agreed that Krungthai Asset Management and MFC Asset Management would act as fund managers for the initial period, according to Ekniti Nitithanprapas, head of State Enterprise Policy Office. 

“The fund should be ready within this month,” he said. The launch of the TFF was approved last December. 

Three road projects, including the Bangkok-Rayong motorway, the outer ring road linking Ayutthaya and Pattaya, and an expressway linking Rama II Road-Dao Kanong-Kanchanaphisek Road, will be backed by the new infrastructure-focused fund, according to Finance Minister Apisak Tantivorawong. 

Thailand’s government plans to spend around THB1.8 trillion on 20 major infrastructure projects by 2022. The targeted projects, spanning the rail, roads, airport and port sectors, are expected to get underway before 2018.