The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, has signed a commitment to provide US$200 million in financing to ISQ Asia Fund, L.P., an infrastructure fund managed by U.S.-based infrastructure investor I Squared Capital.
The Asia Development Bank estimates that over US$1 trillion must be spent on infrastructure to maintain the region’s continued economic growth. With South and Southeast Asian economies being held back by lack of infrastructure, there is an increased need for private sector investments in the region. With support from OPIC, I Squared Capital hopes to deploy capital throughout emerging Asia to finance projects that will contribute to the current economic growth trajectory.
I Squared Capital anticipates investments in infrastructure-related sectors across South and Southeast Asia with a special emphasis on financing urban infrastructure. The fund applied to OPIC’s 2015 Global Engagement Call for Proposals, and is OPIC’s largest fund commitment to date. Through a competitive process, funds are selected that target projects in OPIC-eligible countries for new business development, existing company expansion, restructuring, and/or privatization. This project will help advance the Obama Administration’s Rebalance to Asia and the Pacific, to strengthen cooperation among U.S. allies and partners, leveraging their capabilities to address common regional and global challenges.
Elizabeth L. Littlefield, OPIC President and CEO, said:
“Investments in infrastructure are a critical foundation for lasting development. Across Asia, there is a significant demand for infrastructure that is not currently being met. By partnering with I Squared Capital, we hope to focus on infrastructure investments including renewable energy, transportation, water and waste management throughout Asia’s emerging markets. These projects will promote sustainable economic development and demonstrate the potential for investments in these markets.”
Gautam Bhandari, Partner at I Squared Capital, said:
“South and Southeast Asian infrastructure requires enormous investment in the coming decade to keep pace with rapid urbanization and economic development. This financing will have a significant impact in this vital sector and we are excited that OPIC has chosen I Squared Capital.”