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Multicountry: Keppel Asia Infrastructure Fund

SUMMARY

STATUS
Approved
MEMBER
Multicountry
SECTOR
Financial Institution
E&S CATEGORY
FI
PROJECT NUMBER
000342

FINANCING

PROJECT TYPE
Stand-alone
APPROVED FUNDING
USD150 million
FINANCING TYPE
Nonsovereign

TIMELINE

CONCEPT REVIEW
January 2020
APPRAISAL REVIEW/FINAL REVIEW
March 2020
FINANCING APPROVAL
April 2020

OBJECTIVE

The objective is to mobilize private capital investments into infrastructure in AIIB’s members via a fund with a market risk-adjusted return.

DESCRIPTION

The Keppel Asia Infrastructure Fund (the “Fund”) is a closed-end infrastructure private equity fund with a target fund size of USD1 billion. The Fund will leverage on Keppel Group’s (i) infrastructure track record and regional network; (ii) project development and asset management capabilities; (iii) fund management experience; and (iv) investor network to invest growth and expansion capital into infrastructure projects in Asia. The first closing was achieved on January 28, 2020 and the final closing will be not later than 15 months after the date of the first closing.

PROJECT FINANCING

Fund commitment of USD100 million and co-investments of up to USD50 million in total.

ENVIRONMENTAL AND SOCIAL INFORMATION

AIIB’s Environmental and Social Policy (ESP) is applicable to this project. The project has been placed in Category FI, because the financing structure involves the provision of funds through a Financial Intermediary (the Fund), whereby AIIB delegates to the Fund Manager the decision-making on the use of AIIB’s funds for investments in subprojects that meet the conditions in the project’s environmental and social (E&S) documentation to be agreed with the Fund Manager in the form of eligibility criteria and investment guidelines, and applied through an Environmental, Social and Governance System (ESGS).

The Fund Manager’s ESGS shall include screening, categorizing, appraisal, contracting and monitoring of investments supported by AIIB in accordance with the ESP, the Environmental and Social Exclusion List, regulatory requirements in the jurisdictions of operation and, where applicable, the AIIB Environmental and Social Standards (ESS). A member of the Fund Manager’s management team will be responsible for the oversight of the ESGS, supported by an investment professional and, to the extent required in the E&S documentation, external specialized E&S resources for conducting E&S due diligence on all investment opportunities. The Fund Manager’s staff who are responsible for the oversight of ESGS will undergo training in the implementation of the ESGS.

The Fund Manager will apply eligibility criteria for selection of investments to avoid, where feasible, those exposed to significant E&S risks and potential impacts, including: (i) significant adverse impacts to community health and safety as a result of construction/operation of the assets; (ii) significant number of serious injuries and/or fatal accidents during construction and/or operation of the assets; (iii) involuntary resettlement of people; (iv) impacts on critical habitat, indigenous peoples and cultural resources. These sensitive activities are either to be avoided or managed in accordance with AIIB’s ESSs.

For all investments supported by AIIB, the Fund will require the establishment of a subproject-level ESGS in accordance with the ESP and, where applicable, the ESS, including appropriate processes for timely disclosure of E&S information, conduct of stakeholder engagement activities, and establishment of subproject-level Grievance Redress Mechanisms (GRMs) to address concerns and grievances from both project workers and project-affected people. The Fund Manager will monitor these aspects as part of its subproject monitoring process.

The Fund Manager will be required to periodically disclose the names, locations and sectors of subprojects that are being supported by AIIB’s financing, subject to regulatory constraints and market sensitivities. Furthermore, the Fund Manager will be required to create an external communication mechanism to address views of affected people, enquiries or concerns regarding its own E&S processes and outcomes as well as E&S impacts and performances of AIIB-supported subprojects.

AIIB will further review and validate the Fund Manager’s ESGS and conduct a prior E&S review of the initial subprojects to be financed using AIIB funds. Subsequently, AIIB will conduct prior review of subprojects presenting significant E&S risk, including all Category A and Category B projects determined to have high impact significance in accordance with the agreed ESGS, and receive an annual E&S monitoring report reporting on the E&S performance of all AIIB-supported investments. AIIB will conduct regular monitoring of the Fund’s activities, including visits to selected subprojects.

PROJECT TEAM LEADER

Thomas Walenta

Senior Investment Officer

thomas.walenta@aiib.org

 

BORROWER

Devarshi Das

Chief Executive Officer
Keppel Capital Alternative Asset, Infrastructure

devarshi.das@kecapital.com

 

PROJECT DOCUMENTS

CLIENT/COFINANCING PARTNER DOCUMENTS

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