The Asian Development Bank (ADB) has agreed to invest up to $95 million in Clifford Capital Holdings (CCH), a specialist financing and distribution platform for infrastructure and other real assets globally, headquartered in Singapore. ADB’s investment will help to fund CCH’s future growth plans, including in sustainable infrastructure financing in developing Asia.
The transaction comprises a $50 million investment from ADB and a $45 million investment from the Leading Asia’s Private Sector Infrastructure Fund (LEAP) to be administered by ADB. It is ADB’s first investment in a Singapore entity since the opening of its Singapore Office in March 2020. ADB will have a shareholding interest of 6.3% in CCH immediately post-closing and a pro forma shareholding of 10.8% once all equity capital committed has been fully deployed.
“Developing Asia and the Pacific needs $1.7 trillion annually in infrastructure financing through 2030 to maintain growth, tackle poverty and address climate change,” said Director General of ADB’s Private Sector Operations Department Mike Barrow. “CCH is uniquely placed to attract long-term institutional capital to this underserved market. As a major multilateral investor, we are pleased to support CCH and its subsidiaries through their next stage of growth.”
Most infrastructure investment in Asia is financed by the public sector, but those resources are not enough to meet the region’s infrastructure financing needs. Greater public funding for COVID-19 responses will spur a greater reliance on private sector funding to close the gap. CCH’s focus on financial innovation through securitization can help to meet these financing needs. Through its innovative and competitive financing solutions, CCH can help to position Singapore as a full-service infrastructure financing hub in the region.
CCH is an integrated alternative investment platform with complementary companies, offering origination, distribution and investment management capabilities in the real assets sector, and operating on a financially sustainable and commercial basis. It aims to help address the substantial infrastructure financing gap in Asia, while closely aligning with Singapore’s economic growth initiatives in the infrastructure, maritime and other real assets sectors.
LEAP which was established in 2016 with a $1.5 billion capital commitment the Japan International Cooperation Agency will target a wide range of quality, private sector infrastructure transactions in energy and power generation – with a strong focus on renewable energy and improvements in energy efficiency – as well as water and urban infrastructure, transport, information and communications technology, and health. The fund will also have a flexible mandate to invest in projects at different stages of development through a variety of modalities, including public-private partnerships, joint ventures, infrastructure concessions, and corporate financings, while using a range of debt, equity and mezzanine instruments.
According to ADB, Asia’s infrastructure financing needs are estimated at a massive $800 billion per annum, and tapping the resources of the private sector and development organizations is crucial to bridging this gap. Through this equity investment in LEAP, which will be financed from its Private Sector Investment Finance, JICA aims to further expand its private sector investment activity in quality infrastructure projects in developing countries in Asia and the Pacific.