Exim Bank of China and CIC form $1bn fund to invest in Southeast Asia

China’s sovereign wealth fund is said to commit $300 million in the fund, while IFC is committing up to $100 million.

The Export-Import Bank of China (Exim) has set up a private equity fund with a $1 billion target to invest in Southeast Asian infrastructure and new energy projects.

The fund has received 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.

“Supporting so-called ‘south-south’ investments – investments by developing countries in developing countries – is an important pillar for IFC’s strategy in China,” he added.

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 China Investment Corporation (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 reached by press time.

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 also 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.