KDB plans $176m infra fund launch in late 2017 – exclusive

The policy bank of South Korea is also reviewing a potential $20m debt financing for a midstream gas pipeline project in the US.

Korea Development Bank is planning to launch an infrastructure fund with a size of 200 billion won ($175.7 million; €166 million), reports Private Debt Investor publication Infrastructure Investor. The vehicle is set to invest in Asian infrastructure in the second half of this year.

The KDB Infra Fund, for which the state-owned lender would commit up to 50 percent of total commitments through its private equity division, would seek to attract strategic investors and domestic institutions as well as international organisations like the International Finance Corporation, the Asian Development Bank and the Asian Infrastructure Investment Bank, a KDB spokesperson told Infrastructure Investor.

KDB will source deals for the proposed vehicle, which will have a preliminary focus on investing in Asian infrastructure projects through equity and debt, through its project finance department’s network. The fund could also co-invest alongside multilaterals.
While the vehicle’s structure is yet to be determined, the spokesperson said KDB prefers it to be an individual fund with a maturity of 10 years, managed by the bank’s private equity unit, rather than a fund of funds similar to its existing partnership with the IFC.

Last July, KDB teamed up with the World Bank subsidiary and the Fiji National Provident Fund to participate in IFC’s Emerging Asia Fund, a $1-1.5 billion vehicle focused on infrastructure investments in developing Asia.

The policy bank has so far been investing in domestic and overseas infrastructure through blind funds, which have exposure to energy, waste and gas assets. At the moment, the bank is reviewing a potential debt investment of $20 million in a mid-stream gas pipeline project in the US through one of these vehicles, the spokesperson said without disclosing further details.