Asia Investment Facility (AIF)

Asia Investment Facility (AIF)

The Asia Investment Facility's (AIF) main purpose is to promote additional investments and key infrastructure with a priority focus on projects relevant to the climate change objective and "green" investments in areas of environment and energy, as well as in SME's and social infrastructure.

BACKGROUND

The Asia Investment Facility (AIF) was created in 2010 in line with the objectives of the Development Cooperation Instrument (DCI) and the Regional Strategy for the Asia Region.

The Facility intervenes in cases where the regular market fails to offer sufficient or affordable financing, which may hinder the timely realisation of high priority investment projects with the potential to promote inclusive and sustainable socio-economic development.

Similar to the other EU blending facilities, AIF acts as a catalyst to pool resources and improve the coordination and coherence of donor actions, thus conforming to the principles of ownership, partnership and shared responsibilities set out in the Paris Declaration on Aid Effectiveness and the subsequent Accra Agenda for Action and Busan Partnership Agreement.

GEOGRAPHICAL SCOPE

The following partner countries are eligible for support from AIF: Afghanistan, Bangladesh, Bhutan, Cambodia, China, India, Indonesia Laos, Malaysia, Maldives, Mongolia, Myanmar, Nepal, North Korea, Pakistan, Philippines, Sri Lanka, Thailand and Vietnam. The Facility can also finance regional projects covering two or more of the above countries.

IMPLEMENTATION

The contribution of the European Commission to AIF is decided annually and the resources are made available from the EU’s Development Cooperation Instrument (DCI). The European Commission allocated to AIF for the period 2010-2015 an overall amount of €142 million.

In line with the objectives of the Regional Indicative Programme 2014 – 2020 for Asia, AIF's main objective is the promotion of green economy with a priority focus on climate change and "green" investments.

Consequently, AIF provides finance to projects aiming to achieve the following results:

  • Better energy infrastructure
  • Increased protection of the environment and better focus and control of climate changes impacts
  • Creation and growth of SMEs and improvement in employment, notably in in the context of climate change and "green" investments
  • Improved social services and infrastructures, notably in the context of climate change and "green" investments
  • Better transport infrastructure, notably in the context of climate change and "green" investments

In addition, AIF may support the implementation of bilateral Indicative Programmes in the region.

AIF provides its support through:

  • Investment grants
  • Technical assistance
  • Risk capital and other risk sharing instruments

AIF sets up partnerships, using grant resources from the EU to leverage and pool financing from multilateral and bilateral European Finance Institutions (such as AFD, CDP/SIMEST, EBRD, EIB or KfW), as well as Regional Development Banks (such as the ADB), together with contributions from partner countries and institutions in Asia. 

RESULTS

For the period 2010-2015, 18 projects were approved for grant financing of €89 million, representing total financing from the Finance Institutions of over €1.43 billion and total investment budget of over €2.63 billion. The leverage effect of AIF grants was thus in the range of 1:30.

 

More information can be found in the Facility's 2016 Operational Annual Report.

The list of AIF financed projects can be found here.

For further information you can contact DEVCO AIF.