Asian Infrastructure Investment Bank (AIIB), a China-backed multilateral development bank, has launched a $160-million venture capital (VC) strategy that will focus on early-stage companies promoting clean-tech and tech-enabled sustainable infrastructure.
The programme — AIIB Venture Capital Investment Program for Green and Technology-Enabled Infrastructure — will have an initial $130 million in capital and a $30 million co-investment sleeve, according to the announcement.
It will support early-stage companies across AIIB member countries to innovate and adopt new technologies. It also aims to create new business models that promote green and tech-enabled infrastructure.
The initial target portfolio will comprise approximately 12-15 VC funds to create a diversified VC portfolio that will extend AIIB’s mandate and thematic priorities, according to Jea Young Hu, AIIB’s principal investment officer, private equity.
The programme will adopt a portfolio-driven approach to mitigate risk through diversification and a rigorous cherry-picked selection of VC fund managers, Hu added.
The three-year programme is AIIB’s first foray into the venture capital space, according to Dongik Lee, AIIB director general, Banking Department (Region 1).
“The VC programme will help AIIB build strategic partnerships and diversify its equity portfolio by partnering geographically with reputable and seasoned VC fund managers,” Lee added.
For each VC fund, the Environmental and Social Management System, which details the selection, appraisal, approval, and monitoring of investee companies, will align with AIIB’s Environmental and Social Policy, according to the announcement.
AIIB noted that while VC investment has exhibited continued strength in South and Southeast Asia and across Central Asia, Africa, and the Middle East, these regions continue to invite further capital to bridge a funding gap.
AIIB is a multilateral development bank that began operations in Beijing in January 2016 with 57 founding members. By the end of 2020, it had 103 approved members representing approximately 79% of the global population and 65% of global GDP.
It is capitalised at $100 billion and Triple-A-rated by major international credit rating agencies. The bank has approved at least $22.02 billion in loans covering more than 110 projects.
Last year, AIIB invested $100 million in Kepped Data Centre Fund II of Singapore-based asset manager Keppel Capital Holdings. It also lent $100 million to Vietnam Prosperity Joint Stock Commercial Bank in 2020 to help the bank lend more to private firms disrupted by the COVID-19 pandemic.