ASEAN Infrastructure Fund (AIF)
What is the ASEAN Infrastructure Fund?
The ASEAN Infrastructure Fund (AIF) is a dedicated fund established by the ASEAN member nations and ADB to address the ASEAN region's infrastructure development needs by mobilizing regional savings, including foreign exchange reserves. All AIF-financed infrastructure projects are also cofinanced by ADB funds. The AIF is an integral part of ASEAN’s efforts to strengthen regional connectivity.
ADB is the AIF's administrator, and ADB also provides technical support. ADB's Regional Cooperation and Operations Coordination Division, Southeast Asia Department, is the focal point for the administration of the AIF. ADB also acts as a cofinancier and the lender of record for AIF loans.
What are the priorities?
The AIF provides loans to finance infrastructure investment projects in the transport, energy, water and sanitation, environment and rural development, and social infrastructure sectors. Examples include renewable energy plants, roads or highways, and transmission and power grid development.
In 2018, recognizing the need to make infrastructure financing accessible to all, as well as the urgency to mobilize green finance in response to the region’s climate and environmental concerns, two new facilities were created within the AIF on a three-year pilot basis: an Inclusive Finance Facility and an ASEAN Catalytic Green Finance Facility. The Inclusive Finance (IF) Facility will offer limited concessional loans to members that fall within ADB’s Group A classification. The ASEAN Catalytic Green Finance Facility (ACGF) aims to leverage the AIF’s existing resources to bridge the viability gap for green infrastructure projects and attract private capital into these projects, helping member countries achieve environmental and climate targets.
AIF's projects are part of ADB's project pipeline, based on ADB’s Country Partnership and Strategy and Country Operations Business Plan with the member countries. The AIF project pipeline is confirmed by the respective ASEAN developing member countries through ADB's country programming missions, and must also be approved by the AIF's Board of Directors.
What kind of activities are eligible for the fund?
The AIF provides financing to sovereign or sovereign-guaranteed projects in the ASEAN region.
For projects to be financed under the ACGF, the project will need to fulfill key eligibility criteria, particularly: a) financial sustainability indicators (which will be based upon typical project finance targets such as Debt Service Coverage Ratio, etc.); b) clear environmental goals and targets; and c) a roadmap for attracting private capital investments. Concessional funds from other development partners and climate donors are intended to be raised to support the impact of the ACGF to create a larger pool of funds to deploy, as well as to improve the blended cost of funds available for green infrastructure projects.
Project proponents for national and subregional infrastructure projects in ASEAN developing countries can apply for funding to be cofinanced by ADB and AIF.
Who supports the fund?
Shareholders include Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Viet Nam, and ADB.
The AIF, with ADB as its administrator, builds partnerships with other development partners for cofinancing, knowledge sharing and cooperation in the development of the ACGF.