The region’s finance ministers on Friday set a May launch date for the ASEAN Infrastructure Fund (AIF), a financing project expected to lend as much as US$4 billion to member countries through 2020.
Member countries signed a shareholder agreement for the AIF, with the intention of fully establishing the fund at a meeting to be held in Manila in May, Minister of Economy and Finance Keat Chhon said at a press conference for the ASEAN Finance Ministers’ Meeting, held in Phnom Penh last week.
“This will strongly demonstrate the strength, solidarity and consensus of ASEAN towards sustaining growth, facilitating the physical connectivity, and narrowing the infrastructure development gap in ASEAN,” he said, announcing the results of the meeting.
The AIF was first announced last September as a partnership with the Asian Development Bank, with the aim of providing financing to ASEAN countries in need of infrastructure development, according to an ADB statement at the time.
The fund was started with an initial equity contribution of $485.2 million, with $335.2 million coming from nine ASEAN members and the remaining $150 million provided by ADB, the statement said.
ADB in its September statement said the Fund’s total lending commitment through 2020 was expected to be about $4 billion, leveraging more than $13 billion in infrastructure financing by the end of the decade.
ASEAN countries would need about $60 billion a year over the next 10 years to meet infrastructure demand, the ADB said at the time.
Speaking at the opening the ministers’ meeting, Prime Minister Hun Sen called for the mobilisation of all available resources to bolster the region’s intercountry connectivity.
“It is important to ensure that the less-developed ASEAN members have appropriate access to new financing arrangements to meet their development needs and integration into the region,” he said.
Meanwhile, Keat Chhon noted on Friday that the ministers had agreed to push forward with the so-called Chang Mai Initiative.
To contact the reporter on this story: May Kunmakara at firstname.lastname@example.org