In a step toward an ambitious goal of regional economic integration by 2015, finance ministers of the ASEAN bloc on Saturday said the fund would offer loans to build roads, railways and other projects without direct foreign assistance.

"Our community is now being built with speed. This is a milestone," ASEAN Secretary-General Surin Pitsuwan said after ministers signed the pact in Washington on the sidelines of annual World Bank and IMF meetings.

"The time for donations, the time for just gifts, is over. We have to be very innovative, we have to be very collaborative in our approach."

Despite booming growth rates and world-famous buildings, ASEAN on a per capital basis lags behind major advanced nations in access to highways, railways, clean water and electricity.

The ASEAN Infrastructure Fund will start with $485.2 million and aims to finance six projects a year. By 2020, ASEAN hopes the fund will offer $4 billion in loans and that its total leverage will be worth more than $13 billion.

The fund will be based in Malaysia, the biggest contributor with a $150 million initial investment. Indonesia is the second-largest contributor with $120 million.

The Asian Development Bank, the Manila-based regional financial institution to which Japan and the United States are the largest contributors, will provide $150 million and eventually offer 70 percent of financing for the fund.

AFP