ESR subsidiary ARA has inked a partnership with the Export-Import Bank of China and raised $1bn (€972m) for a fund which targets infrastructure and energy projects in ASEAN countries.
The China-ASEAN Investment Cooperation Fund II (CAF II) fund has two other Chinese state-owned enterprises - Gezhouba Group Overseas Investment Corporation and China Road & Bridge Corporation – as cornerstone investors.
CAF II has the imprimatur of the Chinese government and was flagged by Chinese premier, Li Keqiang, during the 25th China-ASEAN summit in Cambodia this month.
Speaking to IPE Real Assets, Kanishk Bhatia, ARA’s head of infrastructure, said: “I started discussions with China Exim Bank some time ago when they were running a RFP (request for proposal) process to appoint an independent investment adviser. They interviewed 30 different fund managers in extensive selection process before deciding on ARA.”
Bhatia said CAF II would look for the best-adjusted returns from infrastructure and renewables projects across Southeast Asia.
“We look for influential stakes in midmarket assets where we have significant scope for expansion or operational improvement,” he said, adding that these could be platforms or existing assets.
Moses Song, ARA CEO, said: “With the fund’s focus on essential infrastructure and renewable assets, we are delighted to play a part in helping build connectivity, economic, trade and investment cooperation in ASEAN, and to bridge any funding gap.”
Chen Bin, vice president of the Export-Import Bank of China, said: “I’m very glad to see that, with the strong support of government departments and the joint efforts of respective limited partners, CAF II is now set up.”
He said the China Exim Bank had established business ties with ASEAN countries for more than 20 years and financed more than 200 projects in such sectors as power, transportation, water conservancy and industrial production.
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