Oct 13, 2012

Malaysia - Asean fund to take off soon

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IPOH: Asean's largest financing initiative, the Asean Infrastructure Fund (AIF), will start funding the region's infrastructure development after finalising a contribution from one more member country.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said AIF was expected to be implemented before year-end, once additional funding from the particular country was received.

He, however, declined to reveal the nation's identity.

"It is understood that the Parliament of that country has given its approval to participate in the AIF. We are waiting to receive their contribution by year-end, after which the AIF will commence its financing for infrastructure development projects in the region," he said after hosting a visit by Singapore Deputy Prime Minister Tharman Shanmugaratnam at Taman Kebang Jaya, here, yesterday.

Ahmad Husni said currently, AIF had accumulated US$450 million (RM1.4 billion) with 20 per cent contributions from all Asean member countries, excluding Myanmar, and the remainder co-financed by the Asian Development Bank (ADB).

Malaysia is the largest Asean contributor with a US$150 million equity investment, followed by Indonesia with US$120 million.

Previous reports had stated that AIF, which will be based in Malaysia, would be used to offer loans to build roads, railways and other projects without direct foreign assistance.

The fund aims to finance six projects a year and by 2020, Asean hopes the fund to offer US$4 billion in loans with a total leverage of about US$13 billion.

ADB will be sharing its technical expertise to administer the fund.

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