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Green light for Bt100-bn Thailand Future Fund

Dec 15. 2015
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By Erich Parpart

The Nation

The Cabinet yesterday approved the launch of the country’s first infrastructure fund, dubbed the Thailand Future Fund, with Bt100 billion in initial capital to help ease the government’s financial burden from the expected investment on infrastructure next



"If we rely solely on the government budget to fund the infrastructure needs, then you can believe that only a few projects can be done.

"The government wants these infrastructure projects to happen, as they will greatly improve the country’s competitiveness," Finance Minister Apisak Tantivorawong said.

The Bt2.72-trillion fiscal 2016 budget is projected to run a Bt390-billion deficit, as government revenue is projected at Bt2.33 trillion. The investment budget was set at Bt543.63 billion. "The idea is to design a fund to raise capital from the private sector, which has long-term funding such as from the insurance group and retirement funds.

"But we are not blocking out the opportunity for the general public to invest in the fund," he said.

The Transport Ministry estimated last month that about Bt130 billion-Bt140 billion of the Bt1.80 trillion for its 2015-20 investment plan would enter the economic system next year.

The Finance Ministry will inject Bt10 billion into the fund.

Part of the capital will be allocated from the Vayupak Fund to provide income for the fund, as some of the projects that will be included in the infrastructure fund are greenfield projects requiring three to five years to start generating revenue.

The Thailand Future Fund will be given a minimum return on investment target, but the ministry needs more time to discuss a suitable rate.

The minimum return for the Vayupak Fund was set at 3 per cent.

Peerapong Jirasevijinda, managing director and chief investment officer for fund management at BBL Asset Management, told The Nation last month that about 5-9 per cent is required to attract foreign investors, as there are similar funds in other countries in the Asean region.

Pimonwan Mahujchariyawong, deputy managing director of Kasikorn Research Centre, said the infrastructure fund will be able to attract investors during this period of low global interest rates and high volatility within risky assets, as the transport projects are expected to yield a high return in the long run.

"The budget of Bt100 billion should be enough for the capital needed next year, given the delay and the gradual progress of the projects," she said.

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