ARA, a wholly-owned subsidiary of ESR Group, is partnering with Export-Import Bank of China (Exim) for the closing of a US$1 billion (S$1.4 billion) infrastructure fund.

ESR and Exim on Monday (Nov 21) said that the China-Asean Investment Cooperation Fund II (CAF II) will invest in infrastructure, energy resources, as well as information and communication technology, with a “strong focus” on sustainability and ESG standards.

CAF II is ESR’s first infrastructure fund, and also the largest Asean-focused private infrastructure fund to date.

It has been funded by both Ara and Exim, along with Gezhouba Group Overseas Investment Corporation and China Road & Bridge Corporation. Exim has also appointed Ara’s infrastructure arm, Ara Infrastructure, as an investment adviser. Exim’s vice-president Chen Bin said that the fund is also expected to enhance connectivity, trade and investment cooperation between China and Asean countries.

Highlighting a “funding gap” for Asia’s transition towards more renewable and efficient energy sources as well as the “resilience” of infrastructure assets during times of economic downturn, ESR and Exim believe this asset class is becoming increasingly attractive to investors.

ESR co-founders Jeffrey Shen and Stuart Gibson said that CAF II is “well-positioned to benefit from robust long-term macroeconomic trends in Asean, including rising incomes, rapid urbanisation and favourable demographics”.

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“Our move into the infrastructure and renewables business further strengthens our competitive edge as a fully integrated one-stop solution for our capital partners and customers,” added Shen and Gibson, who are also co-chief executives of the group.