The objective is to mobilize private capital into infrastructure investments with exposure to the Asia-Pacific region including AIIB’s members via a fund with a market risk adjusted return.
The Keppel Asia Infrastructure Fund is a closed-end infrastructure private equity fund. 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 Fund achieved its final closing with USD666.9 million of committed capital on November 28, 2021. AIIB’s commitment to the Fund is USD100 million.
Applicable Policy and Categorization. AIIB’s Environmental and Social Policy (ESP), including Environmental and Social Standards (ESSs) and the Environmental and Social Exclusion List (ESEL), 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 in the form of eligibility criteria and investment guidelines, and applied through an Environmental, Social and Governance System (ESGS).
Environmental, Social and Governance System. The Fund Manager’s ESGS includes screening, categorizing, appraisal, contracting, monitoring and reporting of investments supported by AIIB in accordance with the ESP. For all investments supported by AIIB, the Fund is required the establishment of a subproject-level ESGS in accordance with the ESP and, where applicable, the ESSs, 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 (PAPs). The Fund Manager will monitor these aspects as part of its subproject monitoring process.
Environmental and Social Aspect. A member of the Fund Manager’s management team is 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 applies 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. AIIB has reviewed and validated the Fund Manager’s ESGS and conducted a prior E&S review of the initial subprojects to be financed using AIIB funds. AIIB will conduct prior review of subprojects presenting significant E&S risk, including all Category A and selected Category B subprojects 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. These sensitive activities are either to be avoided or managed in accordance with AIIB’s ESP and ESSs. Coal mining, coal transportation or coal-fired power plants, as well as infrastructure exclusively dedicated to support any of these activities will be excluded.
Information Disclosure, Monitoring and Project Grievance Redress Mechanism. E&S information of selected subprojects will be disclosed in accordance with the ESP, in particular for category A subprojects. The Fund Manager will periodically disclose on its website 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 prepare an annual E&S performance report for submission to AIIB based on agreed format. AIIB will conduct regular monitoring of the Fund’s activities, including site visits to selected subprojects, if required. The Fund Manager has created an External Communication Mechanism (ECM), as project-level GRM, to address views of affected people who believe they have been or are likely to be adversely affected by the Project or the subproject concerned but their concerns cannot be addressed satisfactorily through subproject-level GRM. The subproject-level GRM for both subproject workers and subproject-affected people has been established by each subproject supported by AIIB. Information of ECM and subproject-level GRMs and the Project-affected People’s Mechanism (PPM) of AIIB will be disseminated in local language at least to the communities’ surrounding area of subprojects.
Asian Infrastructure Investment Bank
Rusu Lee
Senior Investment Officer
Xiali Wu
Investment Associate
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