Jennee Grace U Rubrico
BANDAR SERI BEGAWAN
THE Association of Southeast Asian Nations
(Asean) is hoping to beef up a fund that is being set up for
infrastructure projects in the region.
Philippine Finance Secretary Cesar V Purisima told reporters yesterday that the 10-member grouping hopes to entice central banks in the region to invest in the Asean Infrastructure Fund (AIF). The AIF will be a combination of equity contributions from Asean member-states and bond issuances.
Asean member-states have pledged to contribute US$335.2 million ($408.41 million) to the fund.
The Asian Development Bank (ADB) will give a counterpart of US$150 million as well as hybrid capital, amounting to US$162 million, in the form of debt and equity.
"We believe that the AIF is a very good initiative. Our goal is that it becomes so successful that the credit rating becomes very high hopefully in the A's so that the central banks of the region can invest in it so that it can become bigger," Purisima said.
He said that at around US$400 million, current pledges for the fund are "a good start".
"But given the infrastructure needs of the Asean, we really need all the capital to be funneled to that," he added.
The ADB has estimated that the region requires infrastructure investments amounting to US$596 billion from 2006 to 2015, with an average investment of US$60 billion per year.
Purisima said that the central banks in the region have the means to invest in the fund.
"We do have the reserves. Across the region we have substantial foreign exchange reserves. Our challenge is to create the mechanisms for recycling these investments, and AIF can be one of that," he said.
According to the International Monetary Fund, Malaysia had foreign currency reserves of US$120.58 billion while Singapore had foreign currency reserves of US$238.5 billion in May 2011.
The Philippines, meanwhile, had foreign currency reserves of US$59 billion, while Thailand had US$177 billion in the same period.
Asean aims to establish the AIF during the informal Asean Finance Ministers' Meeting in September.
The fund was conceived to provide funding for the huge infrastructure requirements of the Asean. Indicative projects include those in the energy, transport and water sectors.
Based on discussions among the Asean member-states, the AIF will be a corporate entity, with a board that will take the key decisions of selection of projects as well as their implementation.
The AIF will be headquartered in Malaysia and will be administered by ADB on behalf of Asean member-countries.
Malaysia has pledged US$150 million for the fund, while Indonesia said it was giving US$120 million. Laos and Cambodia have pledged US$100,000 each, while Thailand, the Philippines and Singapore pledged to contribute US$15 million.
Asean Secretary-General Dr Surin Pitsuwan, however, had earlier said that the fund was not going to be enough to support the implementation of the Asean Master Plan on Connectivity, pointing out that Asia needs to invest about US$8 trillion in overall national infrastructure between 2010 and 2020.
"In addition, Asia needs to spend about US$290 billion on specific regional infrastructure projects in transport and energy that are in the pipeline," he said. The Brunei Times
Philippine Finance Secretary Cesar V Purisima told reporters yesterday that the 10-member grouping hopes to entice central banks in the region to invest in the Asean Infrastructure Fund (AIF). The AIF will be a combination of equity contributions from Asean member-states and bond issuances.
Asean member-states have pledged to contribute US$335.2 million ($408.41 million) to the fund.
The Asian Development Bank (ADB) will give a counterpart of US$150 million as well as hybrid capital, amounting to US$162 million, in the form of debt and equity.
"We believe that the AIF is a very good initiative. Our goal is that it becomes so successful that the credit rating becomes very high hopefully in the A's so that the central banks of the region can invest in it so that it can become bigger," Purisima said.
He said that at around US$400 million, current pledges for the fund are "a good start".
"But given the infrastructure needs of the Asean, we really need all the capital to be funneled to that," he added.
The ADB has estimated that the region requires infrastructure investments amounting to US$596 billion from 2006 to 2015, with an average investment of US$60 billion per year.
Purisima said that the central banks in the region have the means to invest in the fund.
"We do have the reserves. Across the region we have substantial foreign exchange reserves. Our challenge is to create the mechanisms for recycling these investments, and AIF can be one of that," he said.
According to the International Monetary Fund, Malaysia had foreign currency reserves of US$120.58 billion while Singapore had foreign currency reserves of US$238.5 billion in May 2011.
The Philippines, meanwhile, had foreign currency reserves of US$59 billion, while Thailand had US$177 billion in the same period.
Asean aims to establish the AIF during the informal Asean Finance Ministers' Meeting in September.
The fund was conceived to provide funding for the huge infrastructure requirements of the Asean. Indicative projects include those in the energy, transport and water sectors.
Based on discussions among the Asean member-states, the AIF will be a corporate entity, with a board that will take the key decisions of selection of projects as well as their implementation.
The AIF will be headquartered in Malaysia and will be administered by ADB on behalf of Asean member-countries.
Malaysia has pledged US$150 million for the fund, while Indonesia said it was giving US$120 million. Laos and Cambodia have pledged US$100,000 each, while Thailand, the Philippines and Singapore pledged to contribute US$15 million.
Asean Secretary-General Dr Surin Pitsuwan, however, had earlier said that the fund was not going to be enough to support the implementation of the Asean Master Plan on Connectivity, pointing out that Asia needs to invest about US$8 trillion in overall national infrastructure between 2010 and 2020.
"In addition, Asia needs to spend about US$290 billion on specific regional infrastructure projects in transport and energy that are in the pipeline," he said. The Brunei Times
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