Thailand to launch $2.8bn infrastructure fund

Targeting institutional investors, the vehicle is expected to be traded on the country’s stock exchange.

The Thai government will start working on a THB100 billion (€2.62 billion; $2.8 billion) ‘Thailand Future Fund’ in the next two to three weeks as it seeks to boost capital available for infrastructure projects, according to Apisak Tantivorawong, the country’s Finance Minister.

The fund is expected to launch by the end of this year with the aim to support schemes such as the expansion of roads and rail networks. The government hopes to sell stakes in the vehicle to local and foreign institutional investors, including the government’s pension funds.

Tantivorawong said that a new law is needed to establish the fund, which he expects will be traded on the Thai Stock Exchange.

He also mentioned that the scheme may follow the model of Vayupak Fund, a state-controlled infrastructure fund set up in 2003 by the Thai government. Like Vayupak, which has earned around 6 percent return on investment since inception, the new fund is expected to offer returns at a guaranteed rate.

“The government has tried to accelerate the country’s economy in many ways, but the recovery is not as good as expected due to many pressures from inside and outside the country. Therefore, Thailand Future Fund will be an important wheel to push forward our investment and drive the country’s economic growth next year,” said Tantivorawong.

Last week, five transportation projects were put under the fast track public-private partnership (PPP) scheme. Worth a combined THB334 billion, the projects comprise three Metropolitan Rapid Transit (MRT) routes in Bangkok and two intercity expressways.

Earlier in June, Electricity Generating Authority of Thailand formed an infrastructure fund to invest in the right to availability payments of power plants it owns and operates. The state-backed utility has raised $595 million through the fund this year, according to reports.