US$500m boost for region's infrastructure and urban projects

Singapore

A NEW joint venture by Surbana Jurong and Mitsubishi Corporation will set up a US$500 million fund to invest in urban development and infrastructure projects in emerging Asia.

Surbana Jurong Capital - Surbana Jurong's new financial services arm - is signing an agreement with Mitsubishi today to set up a fund management company.

The 50:50 venture to be jointly managed by both parties will set up an investment fund for urban development projects in emerging Asia, primarily in Myanmar, Vietnam, the Philippines, Indonesia, India and Sri Lanka. These may include aviation or rail-related developments, affordable housing, or other urban-related infrastructure, Surbana Jurong told The Business Times.

Surbana Jurong group chief executive officer Wong Heang Fine noted that emerging Asia's rapid growth has driven demand for such projects, adding: "For project owners looking for funding, and investors looking for long-term sustainable returns, Surbana Jurong and Mitsubishi Corporation's new fund management company will provide that capital bridge."

Each partner will contribute up to US$250 million to seed the fund, with the joint venture also raising and managing funds from other accredited or institutional third-party investors.

The joint venture will seek commercially-viable urban infrastructure projects which are in an advanced feasibility stage or in the early phases of construction, and provide equity investment to support them. Qualifying projects will need to meet sustainable environmental, social and corporate governance metrics.

Said Mr Wong: "Our joint venture will tap both partners' know-how across financing and investing, as well as technical and risk analysis to deliver sustainable returns."

Surbana Jurong is one of the largest Asia-based urban and infrastructure consultancies, while Mitsubishi has invested a total of 250 billion yen (S$3.07 billion) in real estate projects in Asean countries since 2013.

This is the first announced move by the newly-established Surbana Jurong Capital, which will source, invest, plan, develop and manage infrastructure and real estate projects.

Mr Wong said the financial services arm will augment Surbana Jurong's value-chain of services, adding: "Through Surbana Jurong Capital, we are now able to provide equity investment and long-term financing solutions to our global clientele, further enhancing the value-add we bring to our partners."