March 30, 2016
JICA today has entered into an agreement with the Asian Development Bank (ADB) to establish a new fund to support private infrastructure investments across Asia and the Pacific. The fund, Leading Asia’s Private Infrastructure Fund, or LEAP, will be seeded by a $1.5 billion commitment from JICA, and will be managed by ADB’s Private Sector Operations Department.
LEAP 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.
The establishment of LEAP originated from a new collaboration package announced by the Government of Japan on November 21, 2015 as one of the follow-up measures of “the Partnership for Quality Infrastructure”. JICA and ADB have been discussing the creation of a trust fund for supporting private sector infrastructure projects and public-private partnerships in Asia and the Pacific. The two organizations signed a Memorandum of Understanding (MOU) on a framework for the partnership on December 17, 2015, and have now reached agreement on terms and conditions for the trust fund.
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.
Going forward, JICA will continue to promote Japan’s “Partnership for Quality Infrastructure” and will continue to support activities to achieve the Sustainable Development Goals (SDGs) pledged in the UN General Assembly in September 2015, through strengthening collaboration with ADB and other multilateral development banks.