Thailand Future Fund to be launched for infrastructure projects

Apisak said it will be introduced in the next "2-3 weeks" but did not clarify what kind of projects or incentives will be supported by the fund.

Prime Minister Prayut Chan-o-cha had instructed deputy prime minister in charge of economic affairs, Somkid Jatusripitak, at Tuesday’s Cabinet meeting to speed up introduction of the infrastructure fund.

"Next year, as correctly identified by Deputy Prime Minister Somkid, is Thailand’s year for investment and the fund will be used to support our proposed investments next year," the minister said at "SET In the City" exhibition arranged by the Stock Exchange of (SET) yesterday.

The minister revealed to reporters that the scheme will be similar to the Finance Ministry’s earlier infrastructure fund called Vayupak Fund, offering a minimum percentage return on investment. He did not clarify how much the minimum return rate would be or what kind of projects the scheme would endorse.

Based on international practice, the infrastructure fund can either be used to fund "green" (government projects that are new) or "brown" (existing government projects that are generating money) fields government projects while the minimum return could be equal to Vayupak’s 3 per cent minimum return or more than that.

Apisak said that a new law would have to be drafted to cover the measure. The main target investors for the infrastructure funds are foreign institutional investors, as the size of the fund is huge. The minister also revealed that the fund would be introduced in the SET.

Ekniti Nitithanprapas, director-general of State Enterprises Policy Office, revealed last month that any infrastructure fund will mostly be for Public Private Partnership projects, which account for 20 per cent of the Transport Ministry’s Bt1.796 trillion transport infrastructure plan from 2015-20.

There are five PPP fast-track projects, which could begin construction next year, including the Mass Rapid Transit Authority’s Blue Extension, Pink and Yellow lines along with two motorway projects with a combined estimated cost of around Bt350 billion.

The Vayupak Fund, which was used to fund various government projects in the past, has earned around 6 per cent return on investment during its existence.

Peerapong Jirasevijinda, managing director and chief investment officer of Fund Management at BBL Asset Management, told The Nation at the same seminar that "Thailand Future Fund" is the right concept as foreign investors, namely from China, Japan and India are currently looking to invest in Asean’s infrastructures projects. The minimum return on investment policy should be able to attract more foreign investors but the rate should be around 5-9 per cent to be "even more attractive" when compared with other similar funds in the region.