Allianz Global Investors is set to launch the first UK infrastructure debt fund to build schools, hospitals and roads, according to the Financial Times.

The fund, which has received government backing, will be launched in the second quarter of 2013 and will aim to raise an initial £1 billion, although Allianz Global Investors anticipates it will raise much more as demand for infrastructure debt increases.

Deborah Zurkow, chief investment officer of infrastructure debt at Allianz GI, told the FT: 'The creation of the fund is a tangible sign of the progress that is being made in the infrastructure debt market. It will benefit both investors in search of attractive, sustainable returns and important infrastructure projects in need of funding.'

The fund group, which has €302 billion in assets under management, also plans to launch an infrastructure fund in Europe in the summer.

The group first announced the launch of an infrastructure debt unit with a team of experts in July 2012, which was followed by BlackRock's move to also launch a unit in November 2012.