The Exim Bank will be the anchor sponsor with a minimum investment of $300 million in the Fund. Three other prominent Chinese institutions will be the other initial cornerstone investors with an additional combined investment of $500 million.

IFC proposes an equity investment for the lesser of $100 million or a 20% stake in the Fund. Since IFC will participate as a cornerstone investor, IFC will be offered an 8% stake in the General Partner of the Fund.

100.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	100.0

* These investment figures are indicative

As stated under the project description, the target geographies for the Fund’s investments are the ASEAN countries.

Infrastructure investment is among the most important challenges facing the Asian economy, with overall growth, living standards, trade and commerce constrained by bottlenecks in the power, water, transport, sanitation and other related sectors. The public sector’s resources are not sufficient to meet all infrastructure investment requirements in the target countries. A key challenge facing developers of private or public-private partnership infrastructure projects has been the limited availability of equity capital. Given the large funding requirements as well as the longer gestation periods of such projects, long term equity, as opposed to the typical available equity with a short term investment horizon, has remained a scarce commodity for such projects. This project will thus address a key constraint to the increasing involvement of the private sector in the development of infrastructure projects thereby resulting in efficient and reliable provision of infrastructure services. It will also free up public sector capital to be invested in other priority sectors.

IFC’s additionality will be in its ability to (i) play an important role as a cornerstone investor; (ii) help achieve its target Fund closing size, which is essential to mitigate concentration risk and to enable successful implementation of the Fund’s investment strategy; (iii) influence the investment mandate of the Fund to adopt a stronger development-focus and to implement Equator Principles and E&S standards; and (iv) participate in establishing market practice terms and governance structures.

This is a category FI project under IFC’s environmental and social review procedure. As a start up Fund, the appraisal will focus on: management team selection and experience (especially with large scale projects with complex E&S issues associated with them e.g. large scale resettlement); investment eligibility criteria and target sectors; approach to due diligence process, specifically on the identification, assessment and management of environmental and social risks to ensure compliance with applicable countries laws and regulations, IFC’s Exclusion List, and the Performance Standards and approaches to portfolio management in both majority and minority stakeholder positions.
A Social & Environmental Management System, appropriately scaled and resourced, will be required as a condition of IFC’s investment. This must include assignment of responsibilities and accountabilities for E&S issues, implementing procedures and processes, access to consultants and other technical expertise as needed, training, monitoring and review processes. Additionally, IFC will need to retain the right to (1) review the implementation and performance of the SEMS for the first few sub-projects, prior to the Fund’s investment decision, (2) for all Category A sub-projects, the Fund to provide IFC with prior notification at which point IFC can request further information OR (3) for all Category A sub-projects, IFC retain the right to review all such proposals. The approach to sub-project review (including notification and/or review turnaround times) will be determined during appraisal. The purpose of such notification and review is to ensure that sub-projects'' compliance with the applicable requirements can be demonstrated.