Chongqing – "Infrastructure is the economic backbone of a country," said Kanishk Bhatia, head of the China-ASEAN Investment Cooperation Fund II (CAF II) Investment Advisor Team. "Through investing in essential infrastructure and renewable assets, we can help to build connectivity, economic, trade, and investment cooperation in the ASEAN region."
CAF II is the largest ASEAN-focused private infrastructure fund with a size of one billion dollars, where the Export-Import Bank of China (CEXIM) is the leading anchor investor and sponsor of CAF II.
The fund will invest in various infrastructure, energy resources, and information and communications sub-sectors, strongly focusing on sustainability and ESG standards in ASEAN countries.
Kanishk Bhatia, Head of China-ASEAN Investment Cooperation Fund II (CAF II) Investment Advisor Team. (Photo/ARA Asset Management Ltd)
Huge investment potential in the ASEAN infrastructure market
"There are huge potential and attractive opportunities in the ASEAN infrastructure market given large infrastructure deficits and favorable macroeconomic trends in the region," said Bhatia.
According to the Asian Development Bank (ADB), the developing countries in Asia will require more than USD 26 trillion of investments between 2016 to 2030, about USD 1.7 trillion per year, in infrastructure to support economic growth, raise living standards, and mitigate climate change impacts.
Of these funds, USD 14.7 trillion, which accounts for 56% of the total, will be needed to transition the energy sector to more renewable and efficient sources.
"One of the main sub-sectors that CAF II will focus on is renewable energy, which includes solar projects, wind projects, hydro, and waste energy," Bhatia continued.
And many infrastructure projects have the natural advantage of cross-border connectivity. For example, airports, ports, mid-stream energy assets, pipelines, or oil storage assets facilitate cross-border trade and energy flows and promote international cooperation.
Logistics development to be attractive investment targets
The Chengdu-Chongqing Economic Circle has an important strategic role in promoting growth in Western China and further development as a manufacturing and logistics hub.
Chengdu-Chongqing economic circle is located at an important intersection of China's Belt and Road and the Yangtze River Economic Belt. It serves as the starting point of the New International Land-Sea Trade Corridor (ILSTC) and has the unique advantage of connecting South-West China with North-West China and South-East Asia.
"Chongqing is rich in mountains and rivers. So from the infrastructure perspective, wind, hydro, and certainty logistics development will be attractive investment targets," Bhatia added.