AIIB to build US$500M credit portfolio to invest in infrastructure bonds

The Asian Infrastructure Investment Bank (AIIB) said Wednesday its board of directors has approved 500 million U.S. dollars for a credit portfolio that invests in corporate bonds to finance infrastructure investment.

The managed portfolio will be comprised of corporate bonds issued by infrastructure-related issuers, including quasi-sovereign bonds and green bonds where proceeds are directed to sustainable infrastructure and other productive sectors, the AIIS said in a statement.

The portfolio “aims to develop infrastructure as an asset class, deepen debt capital markets for infrastructure and promote the integration of environmental, social and governance (ESG) principles in fixed-income investments in emerging Asia,” the statement said.

Bonds purchased under the portfolio will be screened, assessed and managed based on the ESG investing principles, according to the statement.

With this portfolio, “we can unlock the greatest potential to mobilize private capital for infrastructure from institutional investors,” said AIIB vice president and chief investment officer D. J. Pandian.

“If only a small fraction of the trillions of dollars currently under management by institutional investors were allocated to infrastructure projects, there would be a catalyzing impact on emerging Asia’s growth potential,” said AIIB director general for investment operations Dong-Ik Lee.

A multilateral development bank headquartered in Beijing, the AIIB began operations in 2016 and has grown to 93 approved members worldwide.