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The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors has approved investments into two private equity funds for a total commitment of USD125 million. As anchor investor in the funds, AIIB will catalyze private capital for infrastructure investments in dedicated sectors and geographical regions via the funds, and contribute to the environmental, social and corporate governance standards of the funds.
Among these investments is a USD75-million commitment into the CITIC Capital Pan Eurasia Fund and a co-investment sleeve of up to USD50 million with the fund. Focusing on investment in infrastructure and other productive sectors, the fund allows institutional investors to tap the rapidly growing economies and trade flows in Eurasian countries. This is AIIB’s first private equity fund commitment dedicated to Eurasian countries, especially the Commonwealth of Independent States.
Central Asia faces an infrastructure investment need of USD565 billion, according to projections from the Asian Development Bank. Increasing urbanization, population growth and rising energy demand in the region is fueling demand for infrastructure investments. The project addresses these needs with its diversified sector composition, including resource efficiency, renewables, food and water safety, logistics, transportation and technology. The fund has a target size of USD500 million.
Another approved investment represents a commitment of up to USD50 million in the SUSI Asia Energy Transition Fund and co-investments of up to USD50 million with the fund. The project focuses on the energy sector by investing in renewable energy, energy efficiency, energy storage and microgrid projects primarily in the Association of Southeast Asian Nations (ASEAN) region. It is AIIB’s first private equity commitment dedicated to the energy sector. The fund has a target size of USD250 million, allowing institutional investors to take advantage of the energy transition trend in developing Asia.
“The investments in the two private equity funds enable AIIB to enhance its exposure in the Eurasian and ASEAN regions respectively, thus contributing to the diversification of its existing portfolio. This aligns well with AIIB’s Strategy on Investing in Equity,” said AIIB Vice President and Chief Investment Officer D.J. Pandian. “The investments will also allow AIIB to leverage co-investment opportunities to acquire relevant market knowledge and gradually build sector expertise.” |
