Japan's Mitsubishi UFJ Financial Group (MUFG) is set to establish a JPY100 billion (US$925 million) fund that seeks to invest in overseas infrastructure projects - the largest-ever such fund by a Japanese bank - by the end of 2019.
The bank aims to finance the demand for infrastructure developments overseas in the areas of renewable energy and railroad projects. The plan comes as the Japanese banks step up the effort in the expansion of investments in projects that projects relatively high-return potential amid a prolonged low-interest-rate environment at home.
MUFG Bank's fund targets mainly investment in infrastructure exports including renewable energy like wind power, and new transportation development, such as railroads and roads. Government-owned Nippon Export and Investment Insurance provide support to the Japanese companies by establishing a framework to protect infrastructure funds from potential losses in overseas projects. It will work with major banks to create a new insurance service.