ID :
209352
Mon, 09/26/2011 - 07:43
Auther :
Shortlink :
https://oananews.org//node/209352
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ASEAN INFRASTRUCTURE FUND SET TO PAVE WAY FOR INFRASTRUCTURE BOOM
By Salmy Hashim
WASHINGTON, Sept 26 (Bernama) -- Asean Finance Ministers gathered here Saturday to sign an agreement to create an innovative Asean Infrastructure Fund that promises to accelerate regional economic integration, setting the stage for a regional economic community by 2015.
Malaysia, the largest Asean contributor of US$150 million to the fund, will be the leading shareholder in the historic Asean initiative that will finance major infrastructure projects across the region.
Malaysia has also chaired a series of high-level task force meetings since July last year to establish the fund, said Second Finance Minister Ahmad Husni Hanadzlah to Bernama after the signing ceremony.
The fund, to be based in Malaysia as a limited liability company, will help make the masterplan on Asean Connectivity a reality, he said.
The fund is being set up with an initial equity contribution of US$485.2 million, of which US$335.2 million will come from nine Asean members.
After Malaysia, Indonesia is the second largest Asean contributor at US$120 million, the remaining US$150 million is being provided by the Manila-based Asian Development Bank (ADB).
Myanmar will participate in the fund from next year and planned to
contribute US$100,000 to the fund, Ahmad Husni said.
The fund's total lending commitment through 2020 will be about US$4 billion.
With projected 70 per cent co-financing by ADB, it is expected to leverage more than US$13 billion in infrastructure financing by 2020.
"Asean nations have substantial foreign reserves but these funds have largely been invested outside Asean, and outside Asia," said ADB President Haruhiko Kuroda.
"By establishing the Asean Infrastructure Fund, Asean is taking a major step towards investing more of its resources for its own development needs.
ADB will administer the fund and will ensure that safeguards and due diligence are an integral part of the design of financed projects.
One unique feature of the fund is that it will issue debt targeted at central banks in the region which hold substantial foreign exchange reserves.
Asean Secretary-General Surin Pitsuwan said: "With Asean countries holding over US$700 billion in reserves, the fund offers an avenue for mobilizing the region's resources for its growing infratructure needs."
Over the next decade, Asean economies will require about US$60 billion a year to fullly address the region's infrastructure needs.
On a per capita basis, countries in the region have only a fraction of the roads and railways found in developed OECD (Organisation for Economic
Cooperation and Development) countries, and dramatically lower electricity and clean water coverage.
"The Infrastructure Fund will help forge the road, rail and energy links the region needs to create a greater degree of well-being for its people, and make the masterplan on Asean Connectivity a reality," said Ahmad Husni.
The masterplan on Connectivity was issued last year. It identifies a series of strategies and actions to enhance physical, institutional and people-to-people connectivity between nations.
"This is the largest Asean-led initiative in the association's history," said Ahmad Husni, adding that Asean and ADB had identified infrastructure projects worth US$630 million in the region that include transportation, water and energy.
ADB will manage the fund and will target six infrastructure projects a year.
Project selection will be based on sound economic and financial rates of returns and the potential impact of poverty reduction.
Once a successful track record is established over the next five years or so, the AIF will then begin to issue debt of 1.5 times the value of its equity.
WASHINGTON, Sept 26 (Bernama) -- Asean Finance Ministers gathered here Saturday to sign an agreement to create an innovative Asean Infrastructure Fund that promises to accelerate regional economic integration, setting the stage for a regional economic community by 2015.
Malaysia, the largest Asean contributor of US$150 million to the fund, will be the leading shareholder in the historic Asean initiative that will finance major infrastructure projects across the region.
Malaysia has also chaired a series of high-level task force meetings since July last year to establish the fund, said Second Finance Minister Ahmad Husni Hanadzlah to Bernama after the signing ceremony.
The fund, to be based in Malaysia as a limited liability company, will help make the masterplan on Asean Connectivity a reality, he said.
The fund is being set up with an initial equity contribution of US$485.2 million, of which US$335.2 million will come from nine Asean members.
After Malaysia, Indonesia is the second largest Asean contributor at US$120 million, the remaining US$150 million is being provided by the Manila-based Asian Development Bank (ADB).
Myanmar will participate in the fund from next year and planned to
contribute US$100,000 to the fund, Ahmad Husni said.
The fund's total lending commitment through 2020 will be about US$4 billion.
With projected 70 per cent co-financing by ADB, it is expected to leverage more than US$13 billion in infrastructure financing by 2020.
"Asean nations have substantial foreign reserves but these funds have largely been invested outside Asean, and outside Asia," said ADB President Haruhiko Kuroda.
"By establishing the Asean Infrastructure Fund, Asean is taking a major step towards investing more of its resources for its own development needs.
ADB will administer the fund and will ensure that safeguards and due diligence are an integral part of the design of financed projects.
One unique feature of the fund is that it will issue debt targeted at central banks in the region which hold substantial foreign exchange reserves.
Asean Secretary-General Surin Pitsuwan said: "With Asean countries holding over US$700 billion in reserves, the fund offers an avenue for mobilizing the region's resources for its growing infratructure needs."
Over the next decade, Asean economies will require about US$60 billion a year to fullly address the region's infrastructure needs.
On a per capita basis, countries in the region have only a fraction of the roads and railways found in developed OECD (Organisation for Economic
Cooperation and Development) countries, and dramatically lower electricity and clean water coverage.
"The Infrastructure Fund will help forge the road, rail and energy links the region needs to create a greater degree of well-being for its people, and make the masterplan on Asean Connectivity a reality," said Ahmad Husni.
The masterplan on Connectivity was issued last year. It identifies a series of strategies and actions to enhance physical, institutional and people-to-people connectivity between nations.
"This is the largest Asean-led initiative in the association's history," said Ahmad Husni, adding that Asean and ADB had identified infrastructure projects worth US$630 million in the region that include transportation, water and energy.
ADB will manage the fund and will target six infrastructure projects a year.
Project selection will be based on sound economic and financial rates of returns and the potential impact of poverty reduction.
Once a successful track record is established over the next five years or so, the AIF will then begin to issue debt of 1.5 times the value of its equity.
