The Asian Infrastructure Investment Bank (AIIB) has launched the AIIB Venture Capital Investment Program for Green and Technology-Enabled Infrastructure, mobilising US$130 million ($171.94 million) with an additional US$30 million as a co-investment sleeve for its first inaugural VC programme for sustainable infrastructure.
AIIB approved the funding on Dec 22, 2022. This programme will provide scarce capital to early-stage companies through small-scale venture capital (VC) funds, says AIIB in a Feb 9 statement.
AIIB’s three-year captive VC investment programme aims to drive and support early-stage companies across AIIB members to innovate and adopt new technologies. It also aims to create new business models that play a catalytic role in the promotion of green and tech-enabled infrastructure across AIIB members.
The initial target portfolio will comprise approximately 12 to 15 VC funds, says AIIB’s Jea Young Huh, Principal Investment Officer, Private Equity. “AIIB has the dual role of a facilitator and an influencer in accelerating the adoption of innovations in promoting sustainable infrastructure.”
Each VC fund will be required to disclose the name, industry and location of investee companies supported with AIIB's proceeds on its corporate website within 12 months of closing an investment.
Coal mining, coal transportation and coal-fired power plants, as well as infrastructure services exclusively dedicated to supporting any of these activities, will be excluded.
See also: Asian Infrastructure Investment Bank joins Keppel Data Centre Fund II as investor; closes with $1.48 bil of commitments
AIIB is a multilateral development bank. Since starting operations in Beijing in January 2016, AIIB has grown to include 106 approved members worldwide. With US$100 billion in capital, AIIB invests in infrastructure that is green, technology-enabled and promotes regional connectivity.
The bank was proposed by China in 2013. It received the highest credit ratings from the three biggest rating agencies in the world, and is seen as a potential rival to the World Bank and the International Monetary Fund (IMF).
“This is the first time since our founding that AIIB is entering the Asian venture capital market,” says Dongik Lee. AIIB Director General, Banking Department (Region 1). “The VC investment space is characterised by fast transaction speed, a smaller average ticket size and a unique risk-return profile. The VC Program will help AIIB build strategic partnerships and diversify its equity portfolio by partnering geographically with reputable and seasoned VC fund managers.”