The China-led fledgling Asian Infrastructure Investment Bank (AIIB) seeks to form a fund worth 850 billion won ($749 million) to finance India’s infrastructure projects, in which South Korea’s major institutional players including National Pension Service (NPS) and Korea Investment Corp. (KIC) are mulling to take part.

According to sources from the investment banking industry on Sunday, the AIIB established by Beijing last year as an alternative regional lender to the U.S. and Japan-led Asian Development Bank, in a recent investment committee meeting approved a plan to create a fund devoted to infrastructure projects in India. The initiative would be finally approved at the board of directors’ meeting scheduled in June in Jeju Island, Korea.

The fund investing constructions of airports, roads, railroads, tunnels and ports across India would run from next year until 2028, delivering annual return of more than 15 percent.

The bank picked the world’s second-most populous nation as its first major overseas investment target because the economy continues to grow at staggering pace. Indian Prime Minister Narendra Modi has recently pledged ambitious infrastructure outline.

The Indian government is seeking to launch 10 infrastructure projects worth up to $50 billion to add or modernize roads, railway, ports, utility infrastructure, and airports and on urbanization.

The AIIB will supply 170 billion won for the fund, while the rest would be pulled in from global institution, including the NPS and KIC from Korea.

Korea is the fifth-largest shareholder of the AIIB with a 3.81 percent stake following China, India, Russia and Germany. Korea will chair the bank’s general and representative meetings over a year after the second annual meeting in June.

By Song Gwang-sup

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