Philippine clean infrastructure gets USD625 mln injection

The Philippine's clean and green tech sector should receive a boost with the establishment of a USD625 million private equity fund focused on infrastructure and capitalizing on the country’s growing need for private/public partnerships.

The Philippine Investment Alliance for Infrastructure (PIAI) fund is backed by the Asian Development Bank, Dutch pension fund manager APG, Australia's Macquarie Group and the Philippines’ state-owned pension fund Government Service Insurance System (GSIS).

The fund will invest in Philippine core infrastructure assets with an initial focus on existing projects that need expansion or rehabilitation but will also be in a position to support the development of critical infrastructure projects from the ground up.

Macquarie Infrastructure and Real Assets (MIRA), the world’s largest global infrastructure fund manager, is running the fund but has yet to reveal specific projects or companies in which it would invest. It has, however, highlighted interest in water, sanitation, renewable energy and mass transit projects.

According to the Philippine Development Plan, around 12 percent of the country’s USD120 billion investment requirements need to come from the private sector. PINAI will target five to 10 investments of approximately USD50 million to USD125 million each to provide for portfolio diversification.

ADB hopes the success of the PINAI fund will also spur more private equity funds that will catalyze additional foreign capital into the country, and further the development of domestic capital markets.

“Apart from our direct equity investment, ADB’s participation can help mobilize additional investment in the Philippines from top tier international partners, foster competition in domestic infrastructure finance, and establish a secondary market for well-performing infrastructure assets,” said Philip Erquiaga, director general for ADB’s Private Sector Operations Department.

The Dutch company APG takes care of 30 per cent of the Netherland's public and private pensions and is one of Europe's largest fund managers, with an emphasis on high levels of governance and sustainability in investment process.

“PINAI provides for an excellent investment opportunity and we expect it to enjoy an early-mover advantage and to generate attractive risk-adjusted returns for our clients,” said Hans-Martin Aerts, head of infrastructure Asia at APG Asset Management in Hong Kong.