The Beijing-based Asian Infrastructure Investment Bank is establishing a $500m fund that will hold a diversified portfolio of bonds from corporate issuers in the emerging and frontier markets of Asia to finance infrastructure investments.
The fund “aims to promote infrastructure as an asset class, develop debt capital markets for infrastructure and promote the integration of environmental, social and governance principles in fixed income investments” in the region, the AIIB said.
Ultimately, the plan is to support other investors to participate in the initiative or set up similar platforms, the AIIB said. Many investors are leery of investing in infrastructure given the political risks that often accompany such projects outside of developed markets, especially when there are no sovereign guarantees involved.