MACQUARIE KOREA INFRASTRUCTURE FUND REPORTS HALF-YEAR FINANCIAL AND ASSET PERFORMANCE FOR THE SIX MONTHS ENDED 30 JUNE 2016

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1 Macquarie Korea Infrastructure Fund 9F, Hanwha Building 109 Sogong-ro, Jung-gu Seoul KOREA Telephone Fax Internet 29 July 2016 MACQUARIE KOREA INFRASTRUCTURE FUND REPORTS HALF-YEAR FINANCIAL AND ASSET PERFORMANCE FOR THE SIX MONTHS ENDED 30 JUNE 2016 Macquarie Korea Infrastructure Fund ( MKIF ) today announced its interim financial results for the six months ended 30 June 2016 (the Period ), together with its asset performance results for the Period. Highlights for the Period include: MKIF completed two capital management transactions during the Period: - On 14 January 2016, Woomyunsan Tunnel completed its capital restructuring that involved entering into new debt facilities and reducing its share capital (the Transaction ). The Transaction resulted in a one-off accounting gain of KRW 18.7 billion and net cash proceeds to MKIF of KRW 18.6 billion 1 - On 26 May 2016, MKIF entered into a new KRW 60 billion electronic short-term bond program ( STBP ), underwritten by a Korean securities firm at 91-day CD rate + 38bps per annum. The proceeds from STBP s first series issuance were used to repay the 5-year fixed-rated bond of KRW 60 billion maturing on 31 May Over the next 2 years, the STBP allows MKIF to revolve up to KRW 60 billion of debt to meet MKIF s cash needs. 2 On a non-consolidated basis, MKIF recorded revenue and net income of KRW billion and KRW 62.0 billion for the Period. Excluding the one-offs 3, the revenue and net income were KRW billion and KRW 84.4 billion, an increase of 14.3% and 21.0% respectively, compared to the previous corresponding period ( pcp ). The revenue increase on a normalised basis was largely due to the higher dividend income recorded for the Period from Incheon International Airport Expressway. Eleven toll road businesses, on a weighted average basis, delivered traffic volume and revenue 4 growth of 7.6% and 9.1%, respectively, on pcp. For the Period, the traffic volume of the three newer toll road assets 5 have reached approximately 83.4% of the Concession Agreement forecast volume, compared to 77.9% for pcp, recording 11.0% of weighted traffic volume increase compared to pcp. Key operational highlights of Busan New Port Phase 2-3 (BNP) include: - BNP s throughput volume recorded 0.78 million TEU during the Period, a 27.0% growth over pcp, mainly due to the additional volume from the services that were newly added during the second half last year and the Period - Revenue was KRW 43.2 billion for the Period, an increase of 29.4% over pcp, driven by dual growth of tariff rates and volume - Reflecting the delay in the consolidation of CMA CGM and APL services 6 which had been anticipated to move in to BNP, revenue and volume forecasts for FY2016 were revised down from 1. For further details of the Transaction, please refer to MKIF disclosure on 14 January 2016= 2. For further details of the STBP, please refer to MKIF disclosure on 26 May One-off gain of KRW 18.7 billion from the Transaction and KRW 41.1 billion of performance fee for the first half of On a weighted average basis based on revenue size of each asset and the MKIF s equity interest in each concession company 5. Yongin-Seoul Expressway, Seoul-Chuncheon Expressway and Incheon Grand Bridge 6. Acquisition of APL by CMA CGM was initially announced on 7 December 2015 and closed in early June

2 KRW billion and 1.8 million TEU to KRW 94.7 billion and 1.7 million TEU, respectively. 7 The EBITDA estimate for the year however remains unchanged at KRW 45.1 billion mainly due to the expected cost savings o Prior to the Ocean Alliance 8 becoming fully operational in April 2017, BNP is expected to benefit from the volume shift from other New Port terminals to BNP - APL, Evergreen Line and Cosco Container Lines volume have started to shift to BNP and more such volume shifting is expected over the next 12 months 7 - The New Port volume grew by 0.91% over pcp, achieving approximately 0.44 million TEU of total container handling volume 9 MKIF remains financially healthy with a conservative balance sheet position: - Proportionately consolidated cash balance 10 of KRW billion - Continued de-gearing of asset-level debt with a weighted average maturity of 6.9 years - Proportionately consolidated gearing 11 reduced to 28% from 30% in the previous year - MKIF s domestic credit rating remains unchanged at AA0 12 MKIF board of directors today approved a total distribution of KRW 66.3 billion (KRW 200 per share) for the Period which is KRW 20 per share less than the estimated interim distribution 13. The final distribution amount was determined based on the latest estimate of the earnings for the full year 2016, taking into account the non-recurring items incurred during the Period. The final interim distribution will be paid in cash on 29 August 2016 to MKIF s shareholders based on the record date of 30 June Three local concession assets of MKIF are undergoing legal disputes with their respective government authorities, as shown in the following table: Assets Case Status Government Authority - Busan High Court ruled in Administrative order to reinstate favour of BYTL and SICL the original capital structure at (June 2016) the time of the concession - Busan City appealed the agreement signing case to the Supreme Court Baekyang Tunnel ( BYTL ) Soojungsan Tunnel ( SICL ) Gwangju 2 nd Beltway, Section 1 (KBICL) Claim of overdue payments 14 Administrative order to reinstate the original capital structure at the time of the concession agreement signing - Petition submitted to Busan District Court in January 2016 and the court proceedings underway - Undergoing a Supreme Court process Busan City Gwangju City 7. Actual performance may vary from the forecast provided by BNP 8. The Ocean 3 Alliance, BNP s major shipping partner, announced in April 2016 that it will form a new alliance called the Ocean Alliance. Its members will include CMA CGM, APL, Evergreen Line, Orient Overseas Container Line and China Cosco and the alliance is expected to become fully operation by April 2017, subject to regulatory approvals 9 Five container terminals, including BNP, that operate within the New Port of Busan 10. Proportionately consolidated cash balance (including MKIF cash balance of KRW 17.3bn) 11. Gearing = MKIF Net Debt/(MKIF Net Debt + MKIF market capital (3-month average)), where MKIF Net Debt = proportionate net debt from assets + corporate net debt. Excludes shareholder loans 12. MKIF received an issuer credit rating of AA0(Stable) from Korea Investors Service on 6 April Nice Investors Service reaffirmed MKIF s bond rating at AA0(Stable) on 12 April MKIF advised the estimated interim distribution for the Period on 15 June 2016 as per the Enforcement Rules of KOSPI Market Listing Regulation that requires a listed investment company such as MKIF to report the estimated amount of its planned distribution dividends prior to the record date = 14. BYTL: KRW 10.5 billion (toll compensation) / SICL: KRW 3.8 billion (minimum revenue support and toll compensation) 2

3 Financial Results 1 (Unit: KRW million) Six months to 30 June 2016 Six months to 30 June 2015 Revenue 131,113 98,314 Interest income 88,196 90,287 Dividend income (Normal) 24, ,000 3 Dividend income (One-off) 10, Other income 8, Operating Expenses 69,094 36,400 Management fees 18,566 17,494 Performance fee 41, ,835 7 Interest expense 8,214 10,065 Other expenses 1,203 1,006 Net Income 62,019 61,914 EPS (KRW) Normalised Net Income 9 84,384 69,749 Normalised EPS (KRW) 8, Unaudited, non-consolidated 2. Dividend income of KRW 24.1 billion from Incheon International Expressway 3. Dividend income of KRW 8 billion from Soojungsan Tunnel 4. Accounting gain of KRW 10.1 billion from the Transaction of Woomyunsan Tunnel recognised as a one-off dividend income 5. Prepayment fee of KRW 8.6 billion received from Woomyunsan Tunnel as a result of the subordinated debt refinancing 6. Performance fee of KRW 17.9 billion for the first quarter of 2016 and KRW 23.2 billion for the second quarter of The final amount of MKIF performance fee for the second quarter has also been changed from previously announced KRW 23.4 billion to KRW 23.2 billion by applying the final distribution amount to performance of MKIF s Accumulation Index calculation and approved by BOD. For details of the calculation method, please refer to MKIF disclosure on 1 July Performance fee of KRW 7.8 billion for the second quarter of Based on the number of shares outstanding (331.5 mil shares) 9. Excludes one-offs (2015: KRW 7.8 billion of performance fee for the second quarter of 2015/ 2016: Accounting gain of KRW 18.7 billion from the Transaction and KRW 41.1 billion of performance fee ) Traffic Results 2016 First Half nd Quarter Asset Traffic (%) 1 Revenue (%) 2 Traffic (%) 1 Revenue (%) 2 Weighted average growth 7.6% 9.1% 9.6% 11.1% 1. Percentage increase from the previous corresponding period, based on average daily traffic 2. Percentage increase from the previous corresponding period, based on average daily revenue BNP performance 1H H 2016 Change over pcp FY2016 Forecast* Volume (TEU mil) % 1.70 Revenue (KRW billion) % 94.7 EBITDA (KRW billion) % 45.1 EBITDA margin (%) 34.4% 45.7% +33bps 47.6% * Actual performance may vary from the forecast provided by BNP For further information, please contact: Jason Pak Chief Operating Officer Macquarie Korea Asset Management Jason.Pak@macquarie.com Ally An Investor Relations Macquarie Korea Asset Management Ally.An@macquarie.com 3

4 This release is not an offer or solicitation for sale of the securities of Macquarie Korea Infrastructure Fund ( MKIF ) in the United States or in any jurisdiction where any offer, sale or solicitation in respect of such securities is not permitted. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the Securities Act ), or in any jurisdiction where such offer or sale is not permitted. The securities of MKIF have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration or exemption from registration under the Securities Act. There will be no public offer of the securities in the United States. Not for distribution in the United States or in any jurisdiction where any offer, sale or solicitation in respect of the contemplated securities is not permitted. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order ) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as relevant persons ). Any securities will only be available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire any securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. This release does not take into account the investment objectives, financial situation and particular needs of the investor. Before making an investment in MKIF, the investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult an investment adviser if necessary. MKIF or Macquarie Korea Asset Management Co., Ltd.(MKAM) is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of this entity do not represent deposits or other liabilities of Macquarie Bank Limited ABN (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities. Investments in MKIF are subject to investment risk, including possible delays in repayment or loss of income and/or capital investment. Neither MKIF, nor any member of the Macquarie Group companies, including MKAM, guarantees the performance of MKIF, the repayment of capital or the payment of a particular rate of return on MKIF securities. This release contains forward-looking statements. All forward-looking statements are our management s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. 4

5 Appendix1. Financial results (Unaudited, non-consolidated basis) STATEMENTS OF FINANCIAL POSITION As of 30 June 2016, 31 December 2015 and 30 June 2015 (Unit: KRW millions) 30 June December June 2015 Assets Invested assets 1,614,964 1,617,610 1,638,253 Cash & deposits 17,346 15,680 15,625 Loans receivable 1,088,150 1,089,746 1,069,525 Equity securities 1 509, , ,103 Others 449, , ,610 Interest receivables 443, , ,016 Other receivables 2,465 2,430 2,395 Deferred costs, net 3,484 3,712 5,199 Total assets 2,064,820 2,057,356 2,126,863 Liabilities Operational liabilities 365, , ,739 Bond 249, , ,598 Long-term debt 115, , ,141 Others 35,461 12,078 18,269 Payables Management fee payable 9,404 8,867 8,977 Performance fee payable 23,256-7,835 Other liabilities 2,797 3,210 1,455 Total liabilities 400, , ,008 Shareholders equity Share capital 1,670,986 1,670,986 1,670,986 Retained earnings (accumulated deficit) (7,013) 15,160 (7,131) Total shareholders equity 1,663,973 1,686,146 1,663,855 Total liabilities and shareholders equity 2,064,820 2,057,356 2,126, Pursuant to the Financial Investment Services and Capital Markets Act, MKIF reports all its unlisted equity investments at acquisition cost. These are unaudited numbers and as such are subject to change 5

6 STATEMENTS OF INCOME For the half-years ended 30 June 2016 and 30 June 2015 (Unit: KRW million) Six months to 30 June 2016 Six months to 30 June 2015 Ⅰ. Revenue 131,113 98,314 Interest income 88,196 90,287 Dividend income 34,227 8,000 Other income 8, Ⅱ. Expenses 69,094 36,400 Management fees 18,566 17,494 Performance fee 41,111 7,835 Custodian fees Administrator fees Interest expense 8,214 10,065 Other expenses Ⅲ. Net Income 62,019 61,914 6

7 Appendix 2. Traffic and Revenue 1. TRAFFIC VOLUME AND TRAFFIC REVENUE - PORTFOLIO SUMMARY On a weighted average basis 1, traffic and revenue increased by 9.6% and 11.1%, respectively, during the second quarter ended 30 June 2016 (the Quarter) when compared to pcp. On the same basis, traffic and revenue for the Period increased by 7.6% and 9.1%, respectively, on pcp. The highlights for the Period from the traffic results include: The three newer toll road assets 2 delivered stable traffic ramp-up with 11.0% 3 growth on pcp Traffic volumes of Incheon International Airport Expressway and Incheon Grand Bridge rose due to increase in residential population of Cheongna, Yeongjong and Song-do districts and growing number of airport passengers travelling to and from Incheon International Airport Traffic volume across Machang Bridge increased significantly by 17.9% during the Period on pcp due to the new road connection (Changwon-Busan Expressway: Phase 3) from December 2015 and a newly-built container terminal (Masan I-port) operating since March 2015 Traffic volume of Yongin-Seoul Expressway increased due to Yongin area s growing residence occupancy and detour traffic from the congested Gyeongbu Expressway Traffic for each toll road asset is calculated as the average daily traffic volume. Except as stated otherwise, revenue for each toll road asset represents actual average daily revenue collected (excluding VAT). Actual revenue collected does not include minimum revenue compensation receivables from the relevant government authorities or toll-freeze compensations linked to CPI growth. Accordingly, revenue performance of the concession companies is not a direct guide to the revenue performance of MKIF. The revenue growth recorded by the concession companies in which MKIF invests reflects growth of traffic volume and inflation-linked toll rate increases, and may also be influenced by changes in the traffic mix, composed of heavy and light vehicles, for which different toll rates apply Second Quarter 2016 First Half Asset Traffic (%) a Revenue (%) b Traffic Revenue (%)a (%) b % of MKIF Portfolio c Incheon International Airport Expressway 16.6% 1.9% 15.3% 0.3% 4.7 Baekyang Tunnel 3.9% 19.0% 3.5% 18.5% 0.2 Gwangju Second Beltway, Section 1 7.6% 7.8% 6.3% 6.7% 13.2 Gwangju Second Beltway, Section % 5.1% 4.4% 4.6% 3.9 Woomyunsan Tunnel 11.5% 11.9% 7.9% 8.3% 1.3 Cheonan-Nonsan Expressway 7.0% 11.3% 3.9% 8.1% 16.9 Soojungsan Tunnel 4.1% 30.0% 3.0% 28.5% 5.1 Machang Bridge 19.3% 19.1% 17.9% 18.0% 7.1 Yongin-Seoul Expressway 10.1% (0.7%) 9.5% (1.2%) 9.5 Seoul-Chuncheon Expressway 11.8% 15.1% 8.9% 12.3% 8.5 Incheon Grand Bridge 15.7% 19.2% 14.2% 17.8% 10.3 Weighted Average 9.6% 11.1% 7.6% 9.1% - a Percentage increase from the previous corresponding period, based on average daily traffic b Percentage increase from the previous corresponding period, based on average daily revenue c Percentage based on total commitments by MKIF to all investments in the MKIF portfolio 1. On a weighted average basis based on revenue size of each asset and the MKIF s equity interest in each concession company 2. Yongin-Seoul Expressway, Seoul-Chuncheon Expressway and Incheon Grand Bridge 3. Weighted average traffic volume growth compared to pcp== 7

8 2. TRAFFIC AND REVENUE - INDIVIDUAL CONCESSION COMPANY PERFORMANCE Incheon International Airport Expressway 66,327 77, % 63,601 73, % Average daily revenue (1,000 won) 392, , % 379, , % Higher volume growth than revenue growth due to the toll discount implemented as part of the capital management transaction completed in August Toll fare reduced from KRW 7,600 to KRW 6,600 on 1 September 2015 Baekyang Tunnel 76,707 79, % 75,324 77, % Average daily revenue (1,000 won) 55,069 65, % 54,069 64, % Higher revenue growth than volume growth is due to toll fare increase from KRW 800 to KRW 900 effective from 1 September 2015 Gwangju Second Beltway, Section 1 46,779 50, % 44,589 47, % Average daily revenue (1,000 won) 49,560 53, % 47,143 50, % Both traffic and revenue increased compared to pcp as the residential population of Walnam district increased upon completion of a new apartment complex. Lane expansion of Gwangju-to-Hwasoon road, completed in November 2014, contributed towards traffic growth. Gwangju Second Beltway, Section ,614 39, % 36,004 37, % Average daily revenue (1,000 won) 39,797 41, % 38,058 39, % Both traffic and revenue increased compared to pcp as state-owned enterprises including Korea Electric Power Co., Ltd, have relocated their headquarters to Naju Innovation City to the south-west of Gwangju Woomyunsan Tunnel 28,106 31, % 27,504 29, % Average daily revenue (1,000 won) 60,791 68, % 59,474 64, % 8

9 Traffic and revenue increased compared to pcp as the residential population of Woomyun district increased upon completion of a new apartment complex Cheonan-Nonsan Expressway 48,753 52, % 48,230 50, % Average daily revenue (1,000 won) 406, , % 402, , % Higher revenue growth than volume growth is due to toll fare increase from KRW 9,100 to KRW 9,400 effective from 29 December 2015 Soojungsan Tunnel 47,999 49, % 47,274 48, % Average daily revenue (1,000 won) 35,044 45, % 34,511 44, % Higher revenue growth than volume growth is due to the toll fare increase from KRW 800 to KRW 1,000 effective from 1 September 2015 Machang Bridge 32,013 38, % 30,255 35, % Average daily revenue (1,000 won) 71,838 85, % 67,768 79, % A new road connection (Changwon-Busan Expressway Phase 3) opened in December 2015 and a newly built container port (Masan I-port) opened in March 2015 contribute towards traffic growth Yongin-Seoul Expressway Average daily revenue (1,000 won) 85,494 94, % 81,649 89, % 153, , % 146, , % Revenue declined by 1.2% during the Period over pcp despite 9.5% of traffic volume growth due to the toll discount implemented as part of the capital management transaction completed in October Toll fare reduced from KRW 2,000 to KRW 1,800 (small vehicle) on 29 October Traffic increased compared with pcp due to higher traffic driven by Yongin area s growing residence occupancy and detour traffic from the congested Gyeongbu Expressway. Average daily traffic volume for the Period marked 87.4% of the CA forecast 9

10 Seoul-Chuncheon Expressway 43,586 48, % 40,464 44, % Average daily revenue (1,000 won) 277, , % 256, , % Revenue growth was higher than volume growth due to toll fare increase from KRW 6,500 to KRW 6,800 effective from 29 December Average daily traffic volume up to the end of the Period marked 79.7% of the CA forecast Incheon Grand Bridge 38,211 44, % 36,874 42, % Average daily revenue (1,000 won) 197, , % 190, , % Both traffic volume and revenue rose due to an increase in residential population of Yeongjong and Songdo districts and a growing number of airport passengers travelling to and from Incheon International Airport. Revenue growth was higher than volume growth due to toll fare increase from KRW 6,000 to KRW 6,200 effective from 29 December Average daily traffic volume for the Period marked 82.3% of the CA forecast 3. PRIOR PERIOD COMPENSATION PAYMENTS RECEIVED FROM GOVERNMENT AUTHORITIES Apart from Woomyunsan Tunnel and Busan New Port Phase 2-3, the 10 toll road projects are entitled to receive government support payments from their respective government authorities, on top of their toll revenue. Such support payments include revenue compensation, toll-freeze compensation and others depending on the terms of each project. When these support payments are incurred, they are settled annually within 14 months from the end of the year. As of 30 June 2016, the overdue payment receivables from the respective government authorities are shown in the following table: Asset Name Relevant Authority Overdue amount 1 (KRW million) Concession company actions Baekyang Tunnel Busan City 13,196 2 To claim overdue support payment, a petition was submitted to Busan District Court in January 2016 Gwangju Second Beltway, Section 1 3 Payment of the overdue amount is under negotiation Gwangju City 43,019 with Gwangju City Soojungsan Tunnel Busan City 4,706 4 To claim overdue support payment, a petition was submitted to Busan District Court in January Overdue compensations only 2. Unpaid amount from 2010 to 2015 (2010: 1,894mil, 2011: 1,321mil, 2012: 1,958mil, 2013: 2,673mil, 2014: 2,625mil, 2015: 2,725mil) 3. Unpaid amount from 2013 to 2014 (2013: 21,113mil, 2014: 21,906mil) 4. Unpaid amount from 2011 to 2015 (2011: 935mil, 2012: 926mil, 2013: 943mil, 2014: 947mil, 2015: 955 mil) 10