AIIB backs two energy, infrastructure funds

The investment will include a $75 million contribution to CITIC Capital’s Pan Eurasia Fund, which is targeting a first close in the first quarter next year and an overall corpus of $500 million. The fund will invest across resource efficiency, renewable energy, food and water safety, logistics, transportation, and technology. It represents AIIB’s first exposure to Eurasian and ex-Soviet states.

The remaining $50 million will support the Susi Asia Energy Transition Fund, which is managed by Singapore-based Susi Partners Asia with a view to raising $250 million for renewable energy, energy efficiency, energy storage and microgrid projects in the ASEAN region. AIIB said this was its first PE commitment dedicated to energy. The bank will have co-invest rights of up to $50 million in both funds.

“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,” DJ Pandian, a vice president and CIO at AIIB, said in a statement. “The investments will also allow AIIB to leverage co-investment opportunities to acquire relevant market knowledge and gradually build sector expertise.”

AIIB is a multilateral development bank targeting social and economic outcomes in Asian infrastructure, with a significant focus on underpenetrated developing markets. It cites research by Asian Development Bank that indicates Central Asia is facing an infrastructure funding gap of $565 billion due to increasing urbanization, population growth and energy demand.

Earlier this month, AIIB teamed up with Singaporean infrastructure investor Clifford Capital to launch a $2 billion debt platform that will acquire brownfield project loans and manage them with the objective of distributing securitized notes to institutional investors in the public markets.

CITIC Capital is an active investor across Eurasia, especially regarding infrastructure themes related to China’s One Belt One Road policy. In addition to the Pan Eurasia Fund, the firm invests via the Silk Road Fund, which launched in 2016 targeting $600 million. Previous investments include China-Europe logistics project Railway Express, pan-Asian wastewater treatment specialist Organica Water, and Arctic Green Energy, an Icelandic geothermal player considered a potential supplier for China.

Susi Asia is headed by Wymen Chan, formerly of Armstrong Asset Management, who was appointed last year following the unexpected departure of Edgare Kerkwijk. This was said to have delayed the firm’s fundraising plans by three months. Recent activity includes a A$50 million ($34 million) investment last month in Australia’s Starling Energy, a battery storage player for the local rooftop solar segment, via a specialized energy storage fund.

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• Topics
• Greater China
• Central Asia
• Europe
• Fundraising
• Infrastructure
• China
• Asian Infrastructure Investment Bank
• CITIC Capital
• energy
• Logistics
• Transportation
• One Belt One Road