The Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) have agreed to launch a new fund aimed at boosting private infrastructure in the Asia-Pacific, where China is making inroads with its investments.

The organisations said on Friday the new fund, dubbed the Leading Asia’s Private Infrastructure Fund 2 (LEAP 2), would have capital of up to $1.5 billion provided by JICA, serving as the successor fund to LEAP.

The launch, a symbol of ties between Japan and developing Asia, comes a week ahead of summit meetings between Japanese Prime Minister Fumio Kishida and the leaders of the Association of South East Asian Nations (ASEAN).

“I expect the LEAP 2 to further promote investment and loans towards energy and other vital infrastructure in the ASEAN countries,” Japanese Finance Minister Shunichi Suzuki said.

Japan and the United States are the largest shareholders in the ADB, which faces competition from Chinese investment vehicles, although China is also a member of the bank.

“I don’t really see Chinese companies as a competitor per-say,” said Suzanne Gaboury, who heads the ADB’s private sector operations department.

“If companies are looking to deploy the ADB brand or ADB’s seal of approval, it’s because they know that we have a convening power, and we can bring in a lot more financial institutions.”

The new fund will support projects focused on India, Indonesia, Uzbekistan, and Vietnam, including reducing carbon emissions, healthcare, education and agriculture.

LEAP committed over $1 billion for seven years in co-financing across 35 projects in 14 developing countries in the region.

Reuters