EMERGING MARKETS INFRASTRUCTURE FUND INC, N-30D, 1997-07-25

EMERGING MARKETS INFRASTRUCTURE FUND INC
N-30D, 1997-07-25

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<PAGE>

THE EMERGING MARKETS
INFRASTRUCTURE FUND, INC.
-----------------------------
SEMI-ANNUAL REPORT
MAY 31, 1997

<PAGE>
CONTENTS

<TABLE>
<S> <C>
Letter to Shareholders................................................ 1

Portfolio Summary..................................................... 9

Schedule of Investments............................................... 11

Statement of Assets and Liabilities................................... 16

Statement of Operations............................................... 17

Statement of Changes in Net Assets.................................... 18

Financial Highlights.................................................. 19

Notes to Financial Statements......................................... 20

Results of Annual Meeting of Shareholders............................. 25

Description of InvestLink Program..................................... 26
</TABLE>

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<PAGE>
LETTER TO SHAREHOLDERS
June 27, 1997

DEAR SHAREHOLDERS:

We are writing to report on the activities of The Emerging Markets
Infrastructure Fund, Inc. (the "Fund") for the six months ended May 31, 1997.

At May 31, 1997, the Fund's net asset value ("NAV") was $15.43 per share (net of
dividends paid of $0.09 per share), as compared to $13.39 on November 30, 1996.

PERFORMANCE

For the period December 1, 1996 through May 31, 1997, the Fund's total return,
based on NAV and assuming the reinvestment of dividends and distributions, was
16.1%. In comparison, the Morgan Stanley Capital International Emerging Markets
Free Index (the "Index") returned 12.3% in the same period.

Regional and country selection principally were responsible for the Fund's
strong outperformance relative to the Index. NAV greatly benefited from the
potent combination of our decision to substantially overweight Latin America and
dramatically underweight Asia/Pacific with the considerably superior returns
generated by many Latin holdings compared to those of their Asian counterparts.

Our longstanding preference for electricity and telecommunications shares in the
largest Latin markets paid off during the period, with many of the Fund's most
heavily weighted Brazilian and Chilean stocks performing especially well. In
Brazil, the latter included electric companies like Companhia Paulista de Forca
e Luz, Companhia Paranaense de Energia-Copel and Companhia Energetica de Minas
Gerais ("Cemig"), as well as the telecom providers Telecomunicacoes Brasileiras
S.A. and Telecomunicacoes de Sao Paulo S.A. Noteworthy Chilean holdings included
the dominant telecom company, Compania de Telecomunicaciones de Chile S.A., and
a broad group of electrics-- Chilectra S.A., Enersis S.A., Empresa Nacional de
Electricidad S.A. ("Endesa"), Chilgener S.A., Empresa Electrica Pehuenche S.A.
and Compania Electrica del Rio Maipo S.A.

Among Asian nations in the Fund, stock selection was best in Hong Kong, where
our top performers were Cheung Kong Infrastructure Holdings Ltd., China Light &
Power Co. Ltd. and Hongkong Electric Holdings Ltd.; and South Korea, in which
our sole holding was the steel giant Pohang Iron & Steel Co., Ltd. which
achieved strong returns.

From the commencement of investment operations on December 29, 1993 through May
31, 1997, the Fund's total return, based on NAV and assuming the reinvestment of
dividends and distributions, was 13.4%. The Index returned 4.7% during this
period.

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1
<PAGE>
LETTER TO SHAREHOLDERS

INVESTMENT PHILOSOPHY

Our investment philosophy is simple: the provision of basic infrastructure
services is the central requirement for developing economies to sustain high
rates of economic growth. Such services include electricity, telecommunications
and construction, as well as roads and other means of transportation. In most
developing economies today, the availability and quality of such services are
highly inadequate.

The appeal of emerging market infrastructure-related companies typically
emanates from their very low rates of territorial penetration. Many emerging
nations, moreover, are actively engaged in privatization efforts, both to take
government out of such businesses and raise badly needed capital. The
combination of these and other factors means that most emerging electric and
telephone utilities tend to be growth stocks, often with attractive valuations.
There are numerous opportunities for appreciation in such stocks throughout the
emerging world.

COMPANHIA VALE DO RIO DOCE AND CEMIG PRIVATIZATIONS: GOOD NEWS FOR
INFRASTRUCTURE EQUITIES

We have long argued that the conversion of state-owned entities into privately
held, market-based companies is one of the fundamental drivers of emerging
market equities generally. Since our last report, two privatizations of
Brazilian infrastructure companies occurred. In the first, the government sold a
41.7% stake in Companhia Vale do Rio Doce ("CVRD") (the world's largest iron ore
producer) to a consortium led by Brazilian steelmaker Companhia Siderurgica
Nacional ("CSN") for $3.1 billion. The deal had been expected for months and
finally occurred in early May.

We believe that the sale of CVRD has great significance for the broad universe
of emerging markets infrastructure equities:

CONFIDENCE-BUILDER - Investors, as well as much of Latin America and the
emerging community, look to Brazil as a model for the benefits of privatization.
Brazil's success in selling CVRD, then, is widely viewed as a positive sign that
privatization can and will go forward.

PRIVATIZATION BACK ON TRACK - The failure to complete the deal earlier had
grounded to a halt the entire Brazilian privatization process, which was slated
to accelerate in 1997 with the first in a series of high-profile sales of
electric utilities and telecommunications providers. Now, the process is back on
track.

CHANGED STEEL INDUSTRY ENVIRONMENT - There is a good fit between CSN and CVRD,
with much to be gained from synergies and asset reorganizations. For example,
CSN can make greater use of CVRD's iron ore operations and CVRD can route more
of CSN's products through its extensive transportation network. Due to CVRD's
substantive equity positions in several of CSN's competitors and the tangled web
of such ownership throughout the entire Brazilian steel sector, however, it is
most likely that the sector will experience large-scale consolidation and
restructuring over the next few years.

What happens in Brazil is very relevant for infrastructure in all of Latin
America (and, by extension, the rest of the emerging world) simply because
Brazil accounts for the biggest portion (I.E., about 50%) of total Latin steel

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2
<PAGE>
LETTER TO SHAREHOLDERS
production. To put this into sharper focus, the next largest player is Mexico,
whose share is about 27%. A changing steel business in Brazil, therefore,
undoubtedly will have major implications for infrastructure operations in many
parts of the globe.

The second important privatization was that of Cemig, the electric utility
serving the Brazilian state of Minas Gerais. In late May, the state sold a 33%
voting interest for $1.05 billion to an investor group headed by AES, Corp.
("AES"), one of the largest U.S. independent power producers.

The Cemig transaction will have three especially meaningful effects on the Latin
American electricity business:

INCREASED CEMIG COMPETITIVENESS - Cemig will receive a comprehensive overhaul
from AES and Southern Company, an indirect member of the buying group. A new
emphasis on efficiency, large-scale cost reduction and strategic redirection
should transform Cemig into a much more aggressive competitor, both within Minas
Gerais and elsewhere in Brazil.

VALUATION BENCHMARK FOR ELECTRICITY PRIVATIZATIONS - Since Cemig is the first
Brazilian electricity generator to be privatized, its valuation sets the
standard for upcoming transactions involving generators (note: there have been
separate deals for transmission and distribution companies). We note here that
the AES group paid the minimum auction price; if the deal turns out to be
especially successful, we would not be surprised to see future valuations much
higher, whether set by the sellers or offered by the buyers.

INVESTMENT VEHICLE FOR AES - AES already has considerable experience in
Brazilian electricity, having bought control of and engineered the turnaround of
the Rio de Janeiro-area distributor Light. Southern has been an active acquirer
of electric companies in Europe and Asia. Both have made clear the intention to
use Cemig as their primary vehicle for investment in future privatizations of
Brazilian generators and other opportunities in Latin America.

FEATURED COMPANIES

To best illustrate how we have put our investment philosophy to work, we'd like
to discuss a few of our specific holdings.

CHILGENER S.A.

Among the Fund's earliest holdings is Chilgener S.A. ("Chilgener"), Chile's
second-largest electricity generator in terms of generating capacity. Chilgener
became an independent entity in 1988, when it was fully privatized as the
generator for the nation's capitol and largest city, Santiago. Its equity
ownership is distributed among Chilean pension funds (49% of total shares),
small investors (25%), freely traded American Depositary Receipts ("ADRs")
(12%), the Chilean forest products giant Compania de Petreoleos de Chile S.A.
(10%) and foreign investment funds (4%).

Chilgener has significant investment appeal both within Chile and more broadly
in Latin America. In its domestic market, its market share (18%) is exceeded
only by that of Endesa (44% and, by far, the biggest Chilean generator).

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3
<PAGE>
LETTER TO SHAREHOLDERS
Chilgener takes on additional strategic importance, however, due to its highly
advantageous mix of generation sources. About 75% of its capacity is thermal
(I.E., heat-derived) and the remainder hydro (I.E., water-derived); since all
other generators are mostly hydro-based, Chilgener is the lowest-cost producer
and uniquely able to benefit from either high or low rainfall conditions. This
last factor enabled the company to thrive during the severe drought that
affected Chile for several months until recently.

Chilgener is expanding its reach elsewhere in Latin America via an aggressive
foreign investment program. It currently has complete or partial ownership of
numerous electricity operations in Argentina, Colombia, Peru and Brazil, and
figures to regionally expand even further in the next few years.

Here is a brief summary of why our view of Chilgener's prospects is quite
favorable:

VIBRANT DOMESTIC MARKET - Fueled by strong economic and industrial activity,
demand for electricity in Chile currently is vigorous and projected to grow at
annualized rates several percentage points above that of the aggregate economy
over the next few years.

CAPACITY EXPANSION - An aggressive program to add domestic generating capacity
will raise Chilgener's market share, improve its competitive position in Chile's
northern region and reinforce its status as the low-cost producer.

LEADING PRESENCE IN NORTHERN CHILE - Chilgener's principal market is Chile's
central region, which contains over 90% of the country's population. It also has
become the most dynamic player in the mountainous northern region, due to its
early recognition that the surge in mining activity there would require
increasingly heavy electricity consumption. Since there is little access to
hydro capacity in the north, furthermore, most demand there must be filled by
thermal power, Chilgener's strength.

STRONG MANAGEMENT - Top management is competition-hardened and consistently
forward-looking. In addition, it has singular insight into the Chilean
electricity business, having played a major role in the development of the
domestic competitive framework.

COMPETITIVE EXPERIENCE - Chilgener has successfully operated in Latin America's
most competitive/deregulated electricity markets (I.E., Chile, Argentina, Peru,
Bolivia) for years. This should considerably enhance its ability to succeed in
markets that only now are being opened to private-sector participation (I.E.,
Brazil, Mexico, Venezuela, Colombia).

BROADER INFRASTRUCTURE DIVERSIFICATION - Chilgener is actively investing in
businesses that, while electricity-related, are not subject to electricity price
risk (E.G., ports/shipping, natural gas distribution, coal mining and
distribution). These will enable the company both to more effectively manage its
costs and reduce its reliance on generation, and should account for a rising
share of revenues going forward. For investors, then, Chilgener represents much
more of a broad infrastructure play than simply a pure utility.

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4
<PAGE>
LETTER TO SHAREHOLDERS

POHANG IRON & STEEL CO., LTD.

Shares of Pohang Iron & Steel Co., Ltd., more commonly known as "POSCO",
represent an exciting investment opportunity in a relatively unexciting
business. South Korea-based POSCO is the world's second-largest integrated steel
manufacturer in terms of production capacity, exceeded only by Japan's Nippon
Steel. More important, it is universally regarded as perhaps the lowest-cost,
most efficient and most profitable steel company of any size globally.

POSCO was founded in 1968 by the Korean government, which retains a 34%
ownership stake (the remaining equity is publicly held). It dominates the
domestic steel business, with market shares of at least 50% in all major product
categories. The early-1997 bankruptcies of two other Korean steelmakers has only
helped to tighten POSCO's grip on this market even further. By virtue of the
company's sheer size and importance to the Korean economy, the government is
expected to maintain trade policies that will support its ongoing
competitiveness.

In our view, the key element that links together all of POSCO's considerable
investment positives is its low-cost/most-efficient status:

- - A greater share of revenues can result in profits and cash flow. Large
expenditures, therefore, can be internally funded and balance-sheet leverage
can remain relatively low.

- - POSCO enjoys unusually high pricing flexibility.

- - Since steel is a commodity product, cost-competitiveness is of paramount
concern to producers. POSCO's costs are much lower than those of other
steelmaking countries on a dollars-per-ton basis.

- - The potential for meaningful foreign penetration of the Korean market is low.

- - POSCO can be competitive even in the sheltered Japanese market (which accounts
for about 40% of total company exports).

We consider POSCO's future prospects especially bright, due to an unusually
favorable confluence of broad-market conditions and company-specific
circumstances. POSCO's capacity utilization rate normally exceeds 100%, meaning
that it cannot make as much as it can sell; hence, it is aggressively adding
capacity, primarily in value-added/ premium-priced products. Since an industrial
boom in Korea has created a state of overdemand for steel, the new capacity will
easily be absorbed into the market. Heavy demand both in the home and export
sectors has resulted in sharply rising prices worldwide, furthermore, allowing
POSCO to enjoy noteworthy pricing power while simultaneously being assured of
demand for its products.

An additional positive for POSCO is that its expenses are falling while its
prices are going up. This is because it has steadily reduced its workforce in
recent years and already has passed the point of highest capital spending in its
new-capacity program. Profits and cash flow will increase accordingly.

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5
<PAGE>
LETTER TO SHAREHOLDERS

POSCO is an outstanding emerging market infrastructure story not simply because
of its domestic prominence. About one-third of 1996 sales were to other
countries, of which China and Southeast Asia (both of which require increasing
supply of imported steel) accounted for 40%. The reach and strength of its Asian
distribution network, moreover, are unrivaled, giving it a substantial
competitive advantage among steel suppliers to Asian markets.

MOSENERGO

A recent addition to the portfolio is Mosenergo, the most prominent of Russia's
publicly traded electric utilities. Mosenergo's origins date back to the
establishment of the Electric Lighting Corporation in Russia in 1886. It was
privatized in 1993, when 51% of shares were sold to employees. Additional equity
was sold to foreign investors in a 1995 private placement of ADRs. Ownership
currently is distributed among UES, the national transmission company (49%),
foreign investors (35%), employees, management and individual investors (11%)
and other Russian companies (5%).

We view Mosenergo as an attractive opportunity, based on a multifaceted
investment thesis:

TOP PEER RANKING - Mosenergo is the largest of the 72 Russian energos (I.E.,
regional electric companies) in terms of market size, generating capacity and
actual generating output. Its performance also is superior, as measured by
profitability and efficiency. Its generating facilities are youngest by far,
which has allowed it to meaningfully reduce fuel consumption and labor costs.
The age of Mosenergo's facilities becomes even more appealing in light of the
relatively antiquated state of Russian infrastructure generally.

Perhaps the most troublesome aspect of doing business for all Russian utilities
is the combination of a low collections rate for receivables with a low portion
of receivables paid in cash. In 1996, for example, 69% of Mosenergo's
receivables were paid, of which cash was only half (the remainder was paid in
the form of IOU-type notes and barter). Although the company certainly has room
for improvement in this respect, it is well ahead of its peers.

DESIRABLE SERVICE TERRITORY - As its name suggests, Mosenergo provides energy to
Moscow and its environs. Location in Moscow is quite favorable for Mosenergo due
to the area's status as the nation's capitol and one of Russia's fastest growing
economic regions; the sheer size of its population (16 million); its high level
of per-capita income, which is positive both for collections and sales (note:
higher-income people tend to use the most electricity of any customer segment);
and its relatively beneficial regulatory environment. Among the most widely
cited of Mosenergo's advantages from its Moscow location is the diversity of the
region's customer base. This is important because of the differences in
electricity rates paid by the various customer segments, particularly
residential (whose rates currently are lowest and are projected to rise most in
the next few years) and industrial (highest now and projected to drop). Of all
the energos, Mosenergo has the highest proportion of sales to residential
customers and lowest to industrials.

For all of these reasons, Mosenergo's performance is much more likely than that
of its peers to gain during periods of economic buoyancy and much less likely to
suffer during hard economic times.

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6
<PAGE>
LETTER TO SHAREHOLDERS

POSITIVE EQUITY PROFILE - Mosenergo possesses several investment-related
characteristics that make its shares stand apart from most other Russian
equities:

- - The first Russian company to conform its financial statements to U.S.
Generally Accepted Accounting Principles, the standard for most global
investors.

- - One of the most transparent of Russian companies with regard to providing
company information to the investment community, in English as well as
Russian.

- - Perhaps the highest liquidity among Russian stocks.

- - Top management that owns, by far, the largest equity stake among Russian
electricity companies (I.E., 2.5%) and is notably shareholder-oriented.

- - Almost no long-term debt of any kind.

POTENTIAL GROWTH OF THE RUSSIAN EQUITY MARKET -- Generally investment conditions
for Russian equities are improving. Beginning with Mosenergo, nine companies
have issued ADRs, and 8-11 more are expected to do so in 1997. Following the
first New York Stock Exchange listing of a Russian company (I.E., Vimpelcom) in
November 1996, five more have announced plans to list in 1998. All companies
with shares trading outside Russia, furthermore, are among the
highest-capitalized Russian companies and are likely to become the first
generation of Russian blue chips after an initial period of market seasoning.

Like all emerging equity markets, Russia's will tend to be significantly
liquidity-driven for several years. As the Russian macroeconomic environment
continues to improve, an increasing number of foreign investors will be
attracted to Russian stocks and will have only a small universe of issues from
which to choose. This bodes very well for companies like Mosenergo that combine
liquidity and an openness to foreign investors with a market perception as a
good proxy for the overall Russian economy.

OUTLOOK

Prospects for emerging markets infrastructure equities are bright. Here is a
brief summary of the broadly bullish case for emerging markets infrastructure
equities:

- - The combination of huge potential demand and low market penetration, alone, is
enough to keep infrastructure-related companies busy in emerging markets well
into the next century. The World Bank, for example, estimates that the total
cost of infrastructure projects in Asia over the 10-year period of 1995-2004
will be $1.5 TRILLION.

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7
<PAGE>
LETTER TO SHAREHOLDERS

- - Privatization continues to be a fundamental driver for infrastructure stocks.
The substantial number of companies not yet offered for sale will keep the
privatization calendar full for at least the next three to five years. In
addition, the bidding for such sales is growing increasingly competitive, with
several buyers or buying groups aggressively participating.

- - Established-nation telephony and electricity providers, whose products form
the core of a country's infrastructure, are encountering unprecedented
competition as their local markets are deregulated. They now see the best
growth opportunities overseas, especially in the emerging regions of Latin
America and non-Japan Asia.

- - Increasing global competition in key infrastructure sectors such as telephony,
electricity and cement is forcing companies to consolidate via acquisitions in
order to survive. Again, the best opportunities are being found in emerging
markets. Foreign direct investment into developing nations is booming. At the
same time, developing economies are improving and financial markets are being
liberalized. Infrastructure companies typically provide the best-researched,
most liquid stocks available for foreign investment.

- - The level of sovereign credit quality for many developing nations has risen
high enough in the last few years to meaningfully improve investors'
perceptions of country risk.

We appreciate your continued confidence in the Fund and would be pleased to
respond to your questions and comments.

Sincerely yours,

[SIG]
Richard W. Watt
Chief Investment Officer *

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* Richard W. Watt, who is a Managing Director of BEA Associates, is primarily
responsible for managament of the Fund's assets. Mr. Watt has served the Fund in
such capacity since January 1, 1997. He joined BEA Associates on August 2, 1995.
Mr. Watt formerly was associated with Gartmore Investment Limited in London,
where he was head of emerging markets investments and research. In this
capacity, he led a team of four portfolio managers and was manager of a
closed-end fund focusing on smaller Latin American companies. Before joining
Gartmore Investment Limited in 1992, Mr. Watt was a Director of Kleinwort Benson
International Investments in London, where he was responsible for research,
analysis and trading of equities in Latin America and other regions. Mr. Watt is
a Director, President and Chief Investment Officer of the Fund. He also is
Director, President and Chief Investment Officer of The Brazilian Equity Fund,
Inc., The Chile Fund, Inc., The Emerging Markets Telecommunications Fund, Inc.,
The First Israel Fund, Inc., The Latin America Equity Fund, Inc., The Latin
America Investment Fund, Inc. and The Portugal Fund, Inc.

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8
<PAGE>
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THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

PORTFOLIO SUMMARY - AS OF MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
SECTOR ALLOCATION

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
<S> <C> <C>
11/30/96 5/31/97
Cellular Communications 10.36% 6.50%
Electric Distribution 20.82% 20.64%
Electric Generation 7.98% 12.78%
Gas & Oil 7.59% 7.88%
Infrastructure & Construction 10.09% 9.39%
Investment Companies 1.39% 1.35%
Local and/or Long Distance Telephone
Service 18.21% 17.04%
Telecommunications 2.10% 8.93%
Other Infrastructure 12.16% 10.38%
Cash & Cash Equivalents 9.30% 5.11%
</TABLE>

GEOGRAPHIC ASSET BREAKDOWN

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
<S> <C> <C>
11/30/96 5/31/97
Asia 23.36% 20.36%
Caribbean 0.53% 0.35%
Eastern Europe 5.07% 9.81%
Europe 10.99% 7.41%
Latin America 44.02% 48.89%
Middle East 4.99% 6.44%
Global 3.71% 3.68%
Cash & Cash Equivalents 7.33% 3.06%
</TABLE>

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9
<PAGE>
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THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

PORTFOLIO SUMMARY - AS OF MAY 31, 1997 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
SUMMARY OF EQUITY OR EQUITY-LINKED SECURITIES BY COUNTRY/REGION

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
<S> <C> <C>
11/30/96 5/31/97
Argentina 2.44% 1.32%
Brazil 14.85% 22.78%
Chile 14.13% 13.98%
Eastern Europe 5.07% 8.76%
Hong Kong 8.28% 7.28%
India 0.00% 2.81%
Israel 5.00% 6.44%
Italy 4.38% 1.77%
Malaysia 4.77% 2.82%
Mexico 4.41% 3.64%
Peru 3.88% 3.24%
Philippines 3.06% 3.35%
Portugal 3.69% 4.19%
Thailand 2.72% 0.00%
Global 3.71% 3.68%
Other 10.31% 8.83%
</TABLE>

TOP 10 HOLDINGS, BY ISSUER

<TABLE>
<CAPTION>
Percent of Net
Holding Sector Country/Region Assets
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
1. Companhia Paulista de Forca e Luz Electric Distribution Brazil 4.9
- --------------------------------------------------------------------------------------------------------------------------------
2. Companhia Paranaense de Energia-Copel Electric Generation Brazil 4.8
- --------------------------------------------------------------------------------------------------------------------------------
3. Companhia Energetica de Minas Gerais Electric Distribution Brazil 3.8
- --------------------------------------------------------------------------------------------------------------------------------
4. Chilectra S.A. Electric Distribution Chile 3.6
- --------------------------------------------------------------------------------------------------------------------------------
5. Portugal Telecom, S.A. Local and/or Long Distance
Telephone Service Portugal 3.3
- --------------------------------------------------------------------------------------------------------------------------------
6. Compania de Telecomunicaciones de Chile S.A. Local and/or Long Distance
Telephone Service Chile 2.8
- --------------------------------------------------------------------------------------------------------------------------------
7. Millicom International Cellular S.A. Cellular Communications Global 2.8
- --------------------------------------------------------------------------------------------------------------------------------
8. Cementos Mexicanos, S.A. de C.V. Other Infrastructure Mexico 2.8
- --------------------------------------------------------------------------------------------------------------------------------
9. Philippine Long Distance Telephone Co. Local and/or Long Distance
Telephone Service Philippines 2.5
- --------------------------------------------------------------------------------------------------------------------------------
10. Telecomunicacoes Brasileiras S.A. Local and/or Long Distance
Telephone Service Brazil 2.5
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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10
<PAGE>
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THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

SCHEDULE OF INVESTMENTS - MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
<S> <C> <C>
- -----------------------------------------------------
EQUITY OR EQUITY-LINKED SECURITIES-94.89%
EQUITY OR EQUITY-LINKED SECURITIES OF INFRASTRUCTURE
COMPANIES IN EMERGING COUNTRIES-86.07%
ARGENTINA-1.32%
Argentine Cellular
Communications Holdings
Ltd.*+.................. 347,578 $ 0
Camuzzi Argentina
S.A.*+.................. 1,729,347 3,289,996
-----------
TOTAL ARGENTINA (Cost $6,077,487)....... 3,289,996
-----------
BRAZIL-22.78%
Companhia Energetica de
Brasilia................ 33,828,000 4,613,627
Companhia Energetica de
Minas Gerais PN......... 208,390,390 9,538,654
Companhia Paranaense de
Energia-Copel PNB+...... 801,553,000 11,830,488
Companhia Paulista de
Forca e Luz ON.......... 83,823,975 12,262,340
Companhia Siderurgica
Nacional ON............. 36,955,000 1,208,244
Petroleo Brasileiro S.A.
PN...................... 10,161,000 2,429,908
Telecomunicacoes
Brasileiras S.A. PN
ADR..................... 44,690 6,139,289
Telecomunicacoes de Sao
Paulo S.A. PN........... 9,909,291 3,397,207
Telecomunicacoes de Sao
Paulo S.A. PN, Rights
(expiring 06/20/97)+.... 431,824 14,522
Telecomunicacoes do
Parana S.A. PN(a)....... 1,552,000 1,029,351
Trafo Equipamentos
Electricos S.A. PN+..... 509,800 1,466,776
Usinas Siderurgicas de
Minas Gerais S.A.
ADR++................... 142,400 1,548,600
Usinas Siderurgicas de
Minas Gerais S.A. PN.... 1,054,700,000 1,142,879
-----------
TOTAL BRAZIL (Cost $44,579,819)......... 56,621,885
-----------
CHILE-13.98%
Besalco S.A.............. 161,674 976,567

<CAPTION>
No. of Value
Description Shares (Note A)
- -----------------------------------------------------
<S> <C> <C>
CHILE (CONTINUED)
Chilectra S.A. ADS++#.... 320,000 $ 8,877,440
Chilgener S.A............ 4,144,651 1,632,726
Chilquinta Energia
S.A..................... 6,113 70,930
Chilquinta S.A. ADR...... 20,000 310,500
Compania de
Telecomunicaciones de
Chile S.A. ADR#......... 204,000 6,987,000
Compania Electrica del
Rio Maipo S.A........... 2,320,540 1,274,261
Compania General de
Electricidad S.A........ 605,258 2,615,535
Compania Nacional de
Telefonos S.A........... 4,285 2,762
Empresa Electrica de
Antofagasta S.A......... 577,581 296,478
Empresa Electrica de
Arica S.A............... 1,321,792 309,265
Empresa Electrica de
Iquique S.A............. 681,693 211,580
Empresa Electrica
Pehuenche S.A........... 1,044,341 1,533,412
Empresa Nacional de
Electricidad S.A........ 3,092,853 2,237,399
Empresa Nacional de
Telecomunicaciones
S.A..................... 195,234 1,482,259
Empresas Emel S.A........ 84,328 1,833,130
Enersis S.A. ADR#........ 72,000 2,502,000
Sociedad Austral de
Electricidad S.A........ 61,355 1,604,004
-----------
TOTAL CHILE (Cost $24,663,677).......... 34,757,248
-----------
EASTERN EUROPE-8.77%
Brisa Bridgestone
Sabanci................. 4,119,788 1,459,003
Elektrim Spolka Akcyjna
S.A..................... 553,287 4,935,363
Eregli Demir Ve Celik
Fabrikalari T.A.S....... 22,117,400 2,976,454
Global Telesystems
Group*+................. 189,345 3,786,900
Lukoil Oil Co. ADR#...... 45,000 2,700,000
Mosenergo ADR++.......... 65,800 2,500,400
PLD Telekom, Inc.+....... 317,100 1,783,687
</TABLE>

- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- -----------------------------------------------------
<S> <C> <C>
EASTERN EUROPE (CONTINUED)
Surgutneftegaz ADR#...... 38,600 $ 1,653,769
-----------
TOTAL EASTERN EUROPE
(Cost $20,149,554)..................... 21,795,576
-----------
HONG KONG-7.28%
Cheung Kong
Infrastructure Holdings
Ltd..................... 1,390,000 4,404,014
China Light & Power Co.
Ltd.+................... 493,000 2,468,658
Hongkong Electric
Holdings Ltd.+.......... 642,000 2,311,647
Hong Kong & China Gas
Company Ltd.+........... 1,901,491 3,312,916
New World Infrastructure
Ltd.+................... 1,799,600 5,597,259
-----------
TOTAL HONG KONG (Cost $12,930,311)...... 18,094,494
-----------
HUNGARY-1.04%
MOL Magyar Olaj-es
Gazipari Rt. GDR+ (Cost
$2,253,875)............. 138,700 2,590,222
-----------
INDIA-2.05%
Videsh Sanchar Nigam Ltd.
GDR+.................... 18,000 370,800
Videsh Sanchar Nigam Ltd.
GDR+,++................. 229,530 4,728,318
-----------
TOTAL INDIA (Cost $4,750,523)........... 5,099,118
-----------
INDONESIA-2.06%
PT Citra Marga Nusaphala
Persada................. 1,553,000 1,548,212
PT Semen Gresik.......... 1,493,500 3,561,069
-----------
TOTAL INDONESIA (Cost $4,909,787)....... 5,109,281
-----------
ISRAEL-5.23%
ECI Telecommunications
Ltd..................... 168,700 3,901,187
Geotek Communications,
Inc.+#.................. 56,087 250,639
Geotek Communications,
Inc., Convertible
Preferred Series M,
8.50%*.................. 100 515,882
<CAPTION>
No. of Value
Description Shares (Note A)
- -----------------------------------------------------
<S> <C> <C>
ISRAEL (CONTINUED)
Geotek Communications,
Inc., Convertible
Preferred Series N
(units)*+(b)............ 1,584 $ 725,377
Gilat Satellite Networks
Ltd.#+.................. 75,307 2,372,171
Nexus Telecommunications
Systems
Ltd.(units)+(c)......... 210,283 855,326
Superbowl Acquisition
LDC+++.................. 96 1,215,574
Tadiran
Telecommunications
Ltd.#................... 64,500 1,169,063
Teledata Communication
Ltd.+................... 65,700 2,003,850
-----------
TOTAL ISRAEL (Cost $13,312,508)......... 13,009,069
-----------
MALAYSIA-2.82%
Petronas Gas Berhard..... 375,000 1,358,101
Petronas Gas Berhard,
Int'l Warrants (expiring
08/17/00)+.............. 640,000 1,029,013
Tenega Nasional
Berhard................. 517,000 2,366,180
United Engineers Ltd..... 280,000 2,262,108
-----------
TOTAL MALAYSIA (Cost $6,605,037)........ 7,015,402
-----------
PERU-3.24%
Ontario-Quinta A.V.V.*... 2,085,000 2,679,798
Telefonica del Peru S.A.
ADR..................... 94,900 2,408,088
Telefonica del Peru S.A.,
Class B................. 1,157,354 2,961,228
-----------
TOTAL PERU (Cost $5,405,517)............ 8,049,114
-----------
PHILIPPINES-3.35%
International Container
Terminal Services,
Inc.+................... 3,823,500 2,065,777
Philippine Long Distance
Telephone Co. ADR#...... 108,200 6,262,075
-----------
TOTAL PHILIPPINES (Cost $10,691,908).... 8,327,852
-----------
PORTUGAL-4.19%
Cimpor-Cimentos de
Portugal, S.A........... 105,640 2,320,564
</TABLE>

- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- -----------------------------------------------------
<S> <C> <C>
PORTUGAL (CONTINUED)
Portugal Telecom, S.A.... 144,857 $ 5,554,108
Portugal Telecom, S.A.
ADR..................... 66,280 2,551,780
-----------
TOTAL PORTUGAL (Cost $6,653,932)........ 10,426,452
-----------
PUERTO RICO-0.35%
CoreComm Inc.+ (Cost
$1,231,325)............. 54,600 873,600
-----------
SINGAPORE-0.76%
Keppel Corp. Ltd......... 330,000 1,522,757
Keppel Corp. Ltd., Class
A+...................... 82,500 369,153
-----------
TOTAL SINGAPORE (Cost $2,324,745)....... 1,891,910
-----------
SOUTH KOREA-1.28%
Pohang Iron & Steel Co.,
Ltd., ADR# (Cost
$2,915,000)............. 110,000 3,190,000
-----------
VENEZUELA-1.89%
C.A. La Electricadad de
Caracas, SAICA-SACA..... 2,230,954 2,535,149
Compania Anonima Nacional
Telefonos de Venezuela
ADR+.................... 58,350 2,166,244
-----------
TOTAL VENEZUELA (Cost $4,392,538)....... 4,701,393
-----------
GLOBAL-3.68%
International Wireless
Communications, Inc.,
Series D*+.............. 5,503 2,063,625
International Wireless
Communications, Inc.,
Series F*+.............. 386 144,750
International Wireless
Communications, Inc.,
Warrants (expiring
12/31/98)*+............. 31 581
Millicom International
Cellular S.A.+#......... 152,981 6,941,513
-----------
TOTAL GLOBAL (Cost $4,958,198).......... 9,150,469
-----------
TOTAL EMERGING COUNTRIES
(Cost $178,805,741).................... 213,993,081
-----------
<CAPTION>
No. of Value
Description Shares (Note A)
- -----------------------------------------------------
<S> <C> <C>
EQUITY SECURITIES OF INFRASTRUCTURE COMPANIES IN
DEVELOPED COUNTRIES-3.22%
ITALY-1.77%
Telecom Italia Mobile
S.p.A................... 813,600 $ 2,386,093
Telecom Italia Mobile
S.p.A., Non Convertible
Savings Shares.......... 1,155,000 2,017,408
-----------
TOTAL ITALY (Cost $1,819,420)........... 4,403,501
-----------
NETHERLANDS-0.55%
Koninklijke PTT Nederland
N.V. (Cost
$1,063,513)............. 38,900 1,359,287
-----------
SPAIN-0.90%
Iberdrola S.A. (Cost
$1,456,168)............. 182,100 2,233,963
-----------
TOTAL DEVELOPED COUNTRIES
(Cost $4,339,101)...................... 7,996,751
-----------
EQUITY SECURITES OF COMPANIES PROVIDING OTHER
ESSENTIAL SERVICES IN THE DEVELOPMENT OF AN EMERGING
COUNTRY'S INFRASTRUCTURE-4.25%
ISRAEL-0.61%
Koor Industries Ltd...... 13,118 1,162,500
Koor Industries Ltd.
ADR#.................... 20,500 358,750
-----------
TOTAL ISRAEL (Cost $1,689,175).......... 1,521,250
-----------
MEXICO-3.64%
Cementos Apasco, S.A.
de C.V.................. 325,000 2,125,285
Cementos Mexicanos, S.A.
de C.V., Class B........ 955,925 3,917,527
Cementos Mexicanos, S.A.
de C.V. CPO............. 800,000 2,995,194
-----------
TOTAL MEXICO (Cost $11,346,142)......... 9,038,006
-----------
TOTAL OTHER ESSENTIAL SERVICES
(Cost $13,035,317)..................... 10,559,256
-----------
</TABLE>

- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

Units Value
Description (000) (Note A)
- -----------------------------------------------------
<S> <C> <C>
CHILEAN INFLATION-ADJUSTED TIME DEPOSITS-0.21%
Banco Santiago, 6.70%,
06/16/97**.............. CLP 12 $ 369,462
Banco Security, 6.70%,
06/09/97**.............. 5 155,035
-----------
TOTAL CHILEAN INFLATION-ADJUSTED
TIME DEPOSITS (Cost $531,328)......... 524,497
-----------
CHILEAN MUTUAL FUNDS-0.41%
<CAPTION>
No. of
Shares
-------------
<S> <C> <C>
Fondo Mutuo Banco
Santander............... 14,032 50,595
Fondo Mutuo Operacional
BanChile................ 34,140 396,166
Fondo Mutuo Security
Check................... 106,021 455,716
Fondo Mutuo Security
Premium................. 20,088 118,515
-----------
TOTAL CHILEAN MUTUAL FUNDS
(Cost $989,509)........................ 1,020,992
-----------
CHILEAN REPURCHASE AGREEMENTS-0.93%
<CAPTION>
Par (000)
-------------
<S> <C> <C>
Citibank, N.A. (Agreement
dated 05/26/97, to be
repurchased at
$1,288,825), 10.08%,
06/02/97 (Note G)....... CLP 539,000 1,287,330
</TABLE>

- --------------------------------------------------------------------------------
14
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Value
Description (000) (Note A)
- -----------------------------------------------------
<S> <C> <C>
CHILEAN REPURCHASE AGREEMENTS (CONTINUED)
Molina, Swett y Valdes
S.A. (Agreement dated
05/26/97 to be
repurchased at
$1,017,758), 10.20%,
06/02/97 (Note G)....... CLP 425,627 $ 1,017,907
-----------
TOTAL CHILEAN REPURCHASE
AGREEMENTS (Cost $2,301,942).......... 2,305,237
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $5,063,764)...................... 5,088,229
-----------

TOTAL INVESTMENTS-96.94%
(Cost $204,843,923) (Notes A,D)....... 240,988,563
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES-3.06%.................. 7,613,948
-----------
NET ASSETS-100.00%...................... $248,602,511
-----------
-----------
- ---------------------------------------------------------
* Not readily marketable security.
** Effective yield on the date of purchase.
+ Security is non-income producing.
++ SEC Rule 144A security. Such securities are traded
only among "qualified institutional buyers."
=/= Restricted security (See Note F).
# Security or a portion thereof is out on loan.
(a) With an additional 129,520 warrants attached,
expiring 06/24/97, with no market value.
(b) With an additional 30 warrants attached, expiring
06/20/01, with no market value.
(c) Includes 210,283 warrants, expiring 11/28/97, with a
market value of $14,194.
ADR American Depositary Receipts.
ADS American Depositary Shares.
CLP Chilean Pesos.
CPO Ordinary Participation Certificates.
GDR Global Depositary Receipts.
ON Ordinary Shares.
PN Preferred Shares.
PNB Preferred Shares, Class B.
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
15
<PAGE>
- --------------------------------------------------------------------------------

THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES - MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost
$204,843,923) (Note A)................. $240,988,563
Cash (Note A)........................... 3,742,427
Receivables:
Investments sold...................... 3,296,769
Dividends............................. 1,296,401
Interest.............................. 18,981
Prepaid expenses and other assets....... 58,707
------------
Total Assets............................ 249,401,848
------------

LIABILITIES
Payables:
Advisory fee (Note B)................. 520,607
Administration fees (Note B).......... 65,889
Other accrued expenses................ 212,841
------------
Total Liabilities....................... 799,337
------------
NET ASSETS (applicable to 16,107,169
shares of common stock outstanding)
(Note C)............................... $248,602,511
------------
------------

NET ASSET VALUE PER SHARE ($248,602,511
DIVIDED BY 16,107,169)................ $15.43
------------
------------

NET ASSETS CONSIST OF
Capital stock, $0.001 par value;
16,107,169 shares issued and
outstanding (100,000,000 shares
authorized)............................ $ 16,107
Paid-in capital......................... 223,751,241
Undistributed net investment income..... 1,568,065
Accumulated net realized loss on
investments and foreign currency
related transactions................... (12,873,526)
Net unrealized appreciation in value of
investments and translation of other
assets and liabilities denominated in
foreign currencies..................... 36,140,624
------------
Net assets applicable to shares
outstanding............................ $248,602,511
------------
------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
16
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME
Income (Note A):
Dividends............................. $ 3,664,651
Interest.............................. 642,882
Less: Foreign taxes withheld.......... (216,389)
-----------
Total Investment Income............... 4,091,144
-----------
Expenses:
Investment advisory fees (Note B)..... 1,509,072
Administration fees (Note B).......... 188,686
Custodian fees........................ 166,889
Accounting fees....................... 75,968
Printing.............................. 48,986
Audit and legal fees.................. 47,329
Directors' fees....................... 22,010
Insurance............................. 17,991
Transfer agent fees................... 13,585
NYSE listing fees..................... 12,063
Amortization of organizational
costs................................ 4,983
Other................................. 7,634
Brazilian taxes (Note A).............. 113,136
-----------
Total Expenses........................ 2,228,332
-----------
Net Investment Income................. 1,862,812
-----------

NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Net realized gain/(loss) from:
Investments........................... 10,831,442
Foreign currency related
transactions......................... (248,735)
Net change in unrealized appreciation in
value of investments and translation of
other assets and liabilities
denominated in foreign currencies...... 21,871,617
-----------
Net realized and unrealized gain on
investments and foreign currency
related transactions................... 32,454,324
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $34,317,136
-----------
-----------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
17
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the Six Months For the Fiscal Year
Ended May 31, 1997 Ended
(unaudited) November 30, 1996
<S> <C> <C>
---------------------------------------------------

INCREASE IN NET ASSETS
Operations:
Net investment income................. $ 1,862,812 $ 1,880,763
Net realized gain/(loss) on
investments and foreign currency
related transactions................. 10,582,707 (9,785,197)
Net change in unrealized
appreciation/(depreciation) in value
of investments and translation of
other assets and liabilities
denominated in foreign currencies.... 21,871,617 38,167,737
-------------------- -------------------------
Net increase in net assets resulting
from operations.................... 34,317,136 30,263,303
-------------------- -------------------------
Dividends to shareholders:
Net investment income................. (1,449,645) (1,449,645)
-------------------- -------------------------
Total increase in net assets........ 32,867,491 28,813,658
-------------------- -------------------------

NET ASSETS
Beginning of period..................... 215,735,020 186,921,362
-------------------- -------------------------
End of period (including undistributed
net investment income of $1,568,065 and
$1,154,898, respectively).............. $ 248,602,511 $ 215,735,020
-------------------- -------------------------
-------------------- -------------------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
18
<PAGE>
- --------------------------------------------------------------------------------

THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the Fiscal
For the Six Months Years Ended For the Period
Ended November 30, December 29, 1993*
May 31, 1997 ------------------ through
(unaudited) 1996 1995 November 30, 1994
<S> <C> <C> <C> <C>
-----------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period.... $13.39 $11.60 $14.17 $13.89**
---------- -------- -------- ----------
Net investment income/(loss)............ 0.12 0.12 0.07 (0.01)
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions................... 2.01 1.76 (2.59) 0.29
---------- -------- -------- ----------
Net increase/(decrease) in net assets
resulting from operations.............. 2.13 1.88 (2.52) 0.28
---------- -------- -------- ----------
Dividends and distributions to
shareholders:
Net investment income................. (0.09) (0.09) (0.03) --
Net realized gain on foreign currency
related transactions................. -- -- (0.02) --
---------- -------- -------- ----------
Total dividends and distributions to
shareholders........................... (0.09) (0.09) (0.05) --
---------- -------- -------- ----------
Net asset value, end of period.......... $15.43 $13.39 $11.60 $14.17
---------- -------- -------- ----------
---------- -------- -------- ----------
Market value, end of period............. $12.50 $10.75 $9.75 $11.88
---------- -------- -------- ----------
---------- -------- -------- ----------
Total investment return(a).............. 17.18% 11.11% (17.49)% (14.87)%
---------- -------- -------- ----------
---------- -------- -------- ----------

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted)............................... $248,603 $215,735 $186,921 $228,171
Ratio of expenses to average net
assets#................................ 1.92%(b) 1.81% 1.83% 2.02%(b)
Ratio of net investment income/(loss) to
average net assets..................... 1.60%(b) 0.90% 0.65% (0.13)%(b)
Portfolio turnover rate................. 30.97% 23.89% 13.73% 24.63%
Average commission rate per share(c).... $0.0002 $0.0009 -- --
</TABLE>

- ---------------------------------------------------------------------------
* Commencement of investment operations.
** Initial public offering price of $15.00 per share less underwriting
discount of $1.05 per share and offering expenses of $0.06 per share.
# Ratios shown are inclusive of taxes, if any. If such taxes had not
been imposed, the ratio of expenses to average net assets would have
been 1.82% for the six months ended May 31, 1997 and 1.96% for the
period December 29, 1993 through November 30, 1994.
(a) Total investment return at market value is based on the changes in
market price of a share during the period and assumes reinvestment of
dividends and distributions, if any, at actual prices pursuant to the
Fund's Dividend Reinvestment Plan. Total investment return does not
reflect brokerage commissions or initial underwriting discounts and
has not been annualized.
(b) Annualized.
(c) Disclosure is required for fiscal years beginning on or after
September 1, 1995. Represents average commission rate per share
charged to the Fund on purchases and sales of investments subject to
such commissions during the period.

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
19
<PAGE>
- --------------------------------------------------------------------------------

THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------

NOTE A. SIGNIFICANT ACCOUNTING POLICIES
The Emerging Markets Infrastructure Fund, Inc. (the "Fund") was incorporated in
Maryland on October 12, 1993 and commenced investment operations on December 29,
1993. The Fund is registered under the Investment Company Act of 1940, as
amended, as a closed-end, non-diversified management investment company.
Significant accounting policies are as follows:

MANAGEMENT ESTIMATES: The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make certain
estimates and assumptions that may affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.

PORTFOLIO VALUATION: Investments are stated at value in the accompanying
financial statements. All securities for which market quotations are readily
available are valued at the closing price quoted for the securities prior to the
time of determination (but if bid and asked quotations are available, at the
mean between the last current bid and asked prices). Securities that are traded
over-the-counter are valued at the mean between the current bid and the asked
prices, if available. All other securities and assets are valued at the fair
value as determined in good faith by the Board of Directors. Short-term
investments having a maturity of 60 days or less are valued on the basis of
amortized cost. The Board of Directors has established general guidelines for
calculating fair value of non-publicly traded securities. At May 31, 1997, the
Fund held 7.15% of its net assets in securities valued in good faith by the
Board of Directors with an aggregate cost of $18,726,247 and fair value of
$17,773,729. The net asset value per share of the Fund is calculated weekly, at
the end of each month and at any other times determined by the Board of
Directors.

CASH: Deposits held at Brown Brothers Harriman & Co., the Fund's custodian, in a
variable rate account are classified as cash. At May 31, 1997, the interest rate
was 5.00% which resets on a daily basis. Amounts on deposit are generally
available on the same business day.

INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
income tax purposes. Interest income is recorded on an accrual basis; dividend
income is recorded on the ex-dividend date.

TAXES: No provision is made for U.S. federal income or excise taxes as it is the
Fund's intention to continue to qualify as a regulated investment company and to
make the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all U.S. federal income and excise taxes.

At November 30, 1996, the Fund had a capital loss carryover of $18,862,433 of
which $1,079,127 expires in 2002, $12,947,038 expires in 2003 and $4,836,268
expires in 2004.

Income received by the Fund from sources within emerging countries and other
foreign countries may be subject to withholding and other taxes imposed by such
countries.

The Fund is subject to a 10% Chilean repatriation tax with respect to all
remittances from Chile in excess of original invested capital. For the six
months ended May 31, 1997, the Fund incurred no such expense.

Effective January 23, 1997, Brazil imposes a 0.20% CONTRIBUCAO SOBRE
MOVIMENTACAO FINANCIERA ("CPMF") tax that applies to most debit transactions
carried out by financial institutions. Stock exchange

- --------------------------------------------------------------------------------
20
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
transactions are not affected by this tax. For the calendar year ending December
31, 1994, the Brazilian Congress imposed a 0.25% witholding tax on financial
transactions.

FOREIGN CURRENCY TRANSLATIONS: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:

(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and

(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.

The Fund does not isolate that portion of gains and losses in investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to change in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances. However, the Fund does isolate the
effect of fluctuations in foreign exchange rates when determining the gain or
loss upon the sale or maturity of foreign currency denominated debt obligations
pursuant to U.S. federal income tax regulations, with such amount categorized as
foreign exchange gain or loss for both financial reporting and income tax
reporting purposes.

Net currency gains from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation/depreciation in value of investments and translation of
other assets and liabilities denominated in foreign currencies.

Net realized foreign exchange losses represent foreign exchange gains and losses
from sales and maturities of debt securities, transactions in foreign currencies
and forward foreign currency contracts, exchange gains or losses realized
between the trade date and settlement dates on security transactions, and the
difference between the amounts of interest and dividends recorded on the Fund's
books and the U.S. dollar equivalent of the amounts actually received.

The Fund reports certain foreign currency related transactions and foreign taxes
withheld on security transactions as components of realized gains for financial
reporting purposes, whereas such components are treated as ordinary income for
U.S. federal income tax purposes.

SECURITIES LENDING: The market value of securities out on loan to brokers at May
31, 1997, was $18,334,643, for which the Fund has received cash as collateral of
$18,750,707. Such cash collateral was reinvested into a repurchase agreement
which is in turn collateralized by U.S. Government agency securities. Security
loans are required at all times to have collateral at least equal to 102% of the
market value of the securities on loan; however, in the event of default or
bankruptcy by the other party to the agreement, realization and/or retention of
the collateral may be subject to legal proceedings.

During the six months ended May 31, 1997, the Fund earned $23,850 in securities
lending income which is included in interest income in the Statement of
Operations.

DISTRIBUTIONS OF INCOME AND GAINS: The Fund distributes at least annually to
shareholders

- --------------------------------------------------------------------------------
21
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
substantially all of its net investment income and net realized short-term
capital gains, if any. The Fund determines annually whether to distribute any
net realized long-term capital gains in excess of net realized short-term
capital losses, including capital loss carryovers, if any. An additional
distribution may be made to the extent necessary to avoid the payment of a 4%
U.S. federal excise tax. Dividends and distributions to shareholders are
recorded by the Fund on the ex-dividend date.

The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
federal income tax purposes due to U.S. generally accepted accounting
principles/tax differences in the character of income and expense recognition.

OTHER: Some countries require governmental approval for the repatriation of
investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if there is a deterioration in a country's balance of
payments or for other reasons, a country may impose temporary restrictions on
foreign capital remittances abroad. Amounts repatriated prior to the end of
specified periods may be subject to taxes as imposed by a foreign country.

The emerging countries' securities markets are substantially smaller, less
liquid and more volatile than the major securities markets in the United States.
A high proportion of the securities of many companies in emerging countries may
be held by a limited number of persons, which may limit the number of securities
available for investment by the Fund. The limited liquidity of emerging country
securities markets may also affect the Fund's ability to acquire or dispose of
securities at the price and time it wishes to do so.

The Fund, subject to local investment limitations, may invest up to 30% of its
assets in non-publicly traded equity securities which may involve a high degree
of business and financial risk and may result in substantial losses. Because of
the current absence of any liquid trading market for these investments, the Fund
may take longer to liquidate these positions than would be the case for publicly
traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized on such sales could be less than
those originally paid by the Fund. Further, companies whose securities are not
publicly traded may not be subject to the disclosure and other investor
protection requirements applicable to companies whose securities are publicly
traded.

The Fund may enter into repurchase agreements on U.S. Government securities with
primary government securities dealers recognized by the Federal Reserve Bank of
New York and member banks of the Federal Reserve System and on securities issued
by the governments of foreign countries, their instrumentalities and with
creditworthy parties in accordance with established procedures. Repurchase
agreements are contracts under which the buyer of a security simultaneously buys
and commits to resell the security to the seller at an agreed upon price and
date. Repurchase agreements are deposited with the Fund's custodian and,
pursuant to the terms of the repurchase agreement, the collateral must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. If the value of the underlying securities fall
below the value of the repurchase price plus accrued interest, the Fund will
require the seller to deposit additional collateral by the next business day. If
the request for additional collateral is not met, or the seller defaults on its
repurchase obligation, the Fund maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller;
collectibility of such claims may be limited (see Note G).

- --------------------------------------------------------------------------------
22
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------

NOTE B. AGREEMENTS
BEA Associates ("BEA") serves as the Fund's investment adviser with respect to
all investments. As compensation for its advisory services, BEA receives from
the Fund an annual fee, calculated weekly and paid quarterly, equal to 1.30% of
the Fund's average weekly net assets. For the six months ended May 31, 1997, BEA
earned $1,509,072 for advisory services. BEA also provides certain
administrative services to the Fund and is reimbursed by the Fund for costs
incurred on behalf of the Fund (up to $20,000 per annum). For the six months
ended May 31, 1997, BEA was reimbursed $12,890 for administrative services
rendered to the Fund.

Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's U.S.
administrator. The Fund pays BSFM a fee for its services rendered that is
computed at an annual rate of 0.12% of the Fund's average weekly net assets. For
the six months ended May 31, 1997, BSFM earned $139,303 for administrative
services.
The First National Bank of Boston, Sao Paulo ("Banco de Boston") and CELFIN
Administradora de Fondos de Inversion de Capital Extranjero S.A. ("Chilean
administrator") serve as the Fund's administrators with respect to Brazilian and
Chilean investments, respectively. Banco de Boston is paid for its services a
quarterly fee based on an annual rate of 0.10% of average month end Brazilian
net assets of the Fund. In return for services rendered, the Chilean
administrator's fee is paid quarterly at an annual rate of 0.10% of the Fund's
average weekly net assets in Chile, subject to certain minimum annual fees and
reimbursement for a predefined limit of their expenses.
NOTE C. CAPITAL STOCK

The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001 par value. Of the 16,107,169 shares outstanding at May 31, 1997, BEA
Associates owned 7,169 shares.
NOTE D. INVESTMENT IN SECURITIES

For U.S. federal income tax purposes, the cost of securities owned at May 31,
1997 was $204,850,502. Accordingly, the net unrealized appreciation of
investments (including investments denominated in foreign currencies) of
$36,138,061, was composed of gross appreciation of $49,027,205 for those
investments having an excess of value over cost and gross depreciation of
$12,889,144 for those investments having an excess of cost over value.

For the six months ended May 31, 1997, total purchases and sales of securities,
other than short-term investments, were $78,605,352 and $67,362,457,
respectively.
NOTE E. CREDIT AGREEMENT

The Fund, along with 18 other U.S. regulated investment companies for which BEA
serves as investment adviser, has a credit agreement with The First National
Bank of Boston. The agreement provides that each fund is permitted to borrow an
amount equal to the lesser of $50,000,000 or 25% of the net assets of the fund.
However, at no time shall the aggregate outstanding principal amount of all
loans to any of the 19 funds exceed $50,000,000. The line of credit will bear
interest at (i) the greater of the bank's prime rate or the Federal Funds
Effective Rate plus 0.50% or (ii) the Adjusted Eurodollar Rate plus 1.50%. The
amount outstanding under the credit agreement for the Fund averaged $87,671 with
an average interest rate of 8.50% during the six months ended May 31, 1997. The
Fund had no amounts outstanding under the credit agreement at May 31, 1997.

- --------------------------------------------------------------------------------
23
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------

NOTE F. RESTRICTED SECURITIES
Certain of the Fund's investments are restricted as to resale and are valued at
the direction of the Fund's Board of Directors in good faith, at fair value,
after taking into consideration appropriate indications of value. The table
below shows the number of shares held, the acquisition dates, aggregate costs,
fair value as of May 31, 1997, share value of the securities and percentage of
net assets which the securities comprise.

<TABLE>
<CAPTION>
PERCENT
NUMBER FAIR VALUE VALUE OF
OF ACQUISITION AT MAY 31, PER NET
SECURITY SHARES DATES COST 1997 SHARE ASSETS
- --------------------------------------- -------- ---------------- --------- -------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
The Renaissance Fund LDC............... 160 03/30/94 $1,537,995 $ 1,474,546 $ 9,216 0.59
Superbowl Acquisition LDC.............. 96 10/10/94 960,866 1,215,574 12,662 0.49
</TABLE>

The Fund may incur certain costs in connection with the disposition of the above
securities.
NOTE G. COLLATERAL FOR REPURCHASE AGREEMENTS
Listed below is the collateral associated with the repurchase agreement with
Citibank, N.A. outstanding at May 31, 1997:

<TABLE>
<CAPTION>
INTEREST MATURITY CLP MARKET ACCRUED TOTAL
SECURITY SERIES RATE DATE PAR VALUE INTEREST VALUE
- --------------------------------------- ----- ------- ------- ---------- --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Pagares Capitolo Diez y Nueve.......... QA 7.83% 12/21/99 341,797,393 $ 815,687 $28,563 $ 844,250
Pagares Descontables Banco Central de
Chile................................. -- 9.96 06/06/97 1,196,354 2,855 139 2,994
Pagares Reajustable Banco Central de
Chile................................. 1B 6.50 05/01/99 21,331,174 50,906 276 51,182
Pagares Reajustable Banco Central de
Chile................................. 1D 6.48 03/01/00 103,557,230 247,136 4,048 251,184
Pagares Reajustable Banco Central de
Chile................................. 1D 6.51 05/01/99 71,117,849 169,720 921 170,641
--------- ------ ---------
Total $1,286,304 $33,947 $1,320,251
--------- ------ ---------
--------- ------ ---------
</TABLE>

Listed below is the collateral associated with the repurchase agreement with
Molina, Swett y Valdes S.A. outstanding at May 31, 1997:

<TABLE>
<CAPTION>
INTEREST MATURITY CLP MARKET ACCRUED TOTAL
SECURITY RATE DATE PAR VALUE INTEREST VALUE
- --------------------------------------- ------- ------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Banco Bice Deposeto Placo
Reajustable........................... 6.63% 10/01/08 208,687,836 $ 498,026 $ 5,503 $ 503,529
Banco Desarrollo Deposeto Placo
Reajustable........................... 6.78 07/01/14 217,783,137 519,732 14,682 534,414
--------- --------- ---------
Total $1,017,758 $ 20,185 $1,037,943
--------- --------- ---------
--------- --------- ---------
</TABLE>

- --------------------------------------------------------------------------------
24
<PAGE>
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
On March 27, 1997, the Annual Meeting of Shareholders of The Emerging Markets
Infrastructure Fund, Inc. (the "Fund") was held and the following matters were
voted upon:

(1) To re-elect four directors to the Board of Directors of the Fund.

<TABLE>
<CAPTION>
NAME OF DIRECTOR FOR WITHHELD NON-VOTES
- --------------------------------------------------------------------------------- ------------ --------- ----------
<S> <C> <C> <C>
Peter A. Gordon 11,706,641 772,098 3,628,430
George W. Landau 11,710,251 768,488 3,628,430
Richard W. Watt 11,734,045 744,694 3,628,430
William W. Priest, Jr. 11,709,541 769,198 3,628,430
</TABLE>

In addition to the directors elected at the meeting, Dr. Enrique R. Arzac, James
J. Cattano and Martin M. Torino continue to serve as directors of the Fund.

(2) To ratify the selection of Coopers & Lybrand L.L.P. as independent
accountants for the fiscal year ending November 30, 1997.

<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTES
------------ --------- --------- ----------
<S> <C> <C> <C> <C>
11,839,356 587,145 52,238 3,628,430
</TABLE>

- --------------------------------------------------------------------------------
25
<PAGE>
DESCRIPTION OF INVESTLINK* PROGRAM

The InvestLink Program is sponsored and administered by The First National Bank
of Boston, not by The Emerging Markets Infrastructure Fund, Inc. (the "Fund").
The First National Bank of Boston will act as program administrator (the
"Program Administrator") of the InvestLink Program (the "Program"). The purpose
of the Program is to provide interested investors with a simple and convenient
way to invest funds and reinvest dividends in Shares of the Fund's common stock
("Shares") at prevailing prices, with reduced brokerage commissions and fees.

An interested investor may join the Program at any time. Purchases of Shares
with funds from a participant's cash payment or automatic account deduction will
begin on the next day on which funds are invested. If a participant selects the
dividend reinvestment option, automatic investment of dividends generally will
begin with the next dividend payable after the Program Administrator receives
his enrollment form. Once in the Program, a person will remain a participant
until he terminates his participation or sells all Shares held in his Program
account, or his account is terminated by the Program Administrator. A
participant may change his investment options at any time by requesting a new
enrollment form and returning it to the Program Administrator.

A participant will be assessed certain charges in connection with his
participation in the Program. First-time investors will be subject to an initial
service charge which will be deducted from their initial cash deposit. All
optional cash deposit investments will be subject to a service charge. Sales
processed through the Program will have a service fee deducted from the net
proceeds, after brokerage commissions. In addition to the transaction charges
outlined above, participants will be assessed per share processing fees (which
in-
clude brokerage commissions.) Participants will not be charged any fee for
reinvesting dividends.

The number of Shares to be purchased for a participant depends on the amount of
his dividends, cash payments or bank account or payroll deductions, less
applicable fees and commissions, and the purchase price of the Shares. The
Program Administrator uses dividends and funds of participants to purchase
Shares of Company Common Stock in the open market. Such purchases will be made
by participating brokers as agent for the participants using normal cash
settlement practices. All Shares purchased through the Program will be allocated
to participants as of the settlement date, which is usually three business days
from the the purchase date. In all cases, transaction processing will occur
within 30 days of the receipt of funds, except where temporary curtailment or
suspension of purchases is necessary to comply with applicable provisions of the
Federal Securities laws or when unusual market conditions make prudent
investment impracticable. In the event the Program Administrator is unable to
purchase Shares within 30 days of the receipt of funds, such funds will be
returned to the participants.

The average price of all Shares purchased by the Program Administrator with all
funds received during the time period from two business days preceding any
investment date up to the second business day preceding the next investment date
shall be the price per share allocable to a participant in connection with the
Shares purchased for his account with his funds or dividends received by the
Program Administrator during such time period. The average price of all Shares
sold by the Program Administrator pursuant to sell orders received during such
time period shall be the price per share allocable to a participant in
connection with the Shares sold for his account pursuant to his sell orders
received by the Program Administrator during such time period.

The First National Bank of Boston, as Program Administrator, administers the
Program for participants, keeps records, sends statements of account to
participants and performs other duties relating to the Program. Each participant
in the Program will receive a

- --------------------------------------------------------------------------------
26
<PAGE>
DESCRIPTION OF INVESTLINK* PROGRAM (CONTINUED)
statement of his account following each purchase of Shares. The statements will
also show the amount of dividends credited to such participant's account (if
applicable), as well as the fees paid by the participant. In addition, each
participant will receive copies of the Fund's Annual Report to shareholders,
proxy statements and, if applicable, dividend income information for tax
reporting purposes.

If the Fund is paying dividends on the Shares, a participant will receive
dividends through the Program for all Shares held on the dividend record date on
the basis of full and fractional Shares held in his account, and for all other
Shares of the Fund registered in his name. The Program Administrator will send
checks to the participants for the amounts of their dividends that are not
to be automatically reinvested at no cost to the participants.

Shares of the Fund purchased under the Program will be registered in the name of
the accounts of the respective participants. Unless requested, the Fund will not
issue to participants certificates for Shares of the Fund purchased under the
Program. The Program Administrator will hold the Shares in book-entry form until
a Program participant chooses to withdraw his Shares or terminate his
participation in the Program. The number of Shares purchased for a participant's
account under the Program will be shown on his statement of account. This
feature protects against loss, theft or destruction of stock certificates.

A participant may withdraw all or a portion of the Shares from his Program
account by notifying the Program Administrator. After receipt of a participant's
request, the Program Administrator will issue to such participant certificates
for the whole Shares of the Fund so withdrawn or, if requested by the
participant, sell the Shares for him and send him the proceeds, less applicable
brokerage commissions, fees, and transfer taxes, if any. If a participant
withdraws all full and fractional Shares in his Program account, his
participation in the Program will be terminated by the Program Administrator. In
no case will certificates for fractional Shares be issued. The Program
Administrator will convert any fractional Shares held by a participant at the
time of his withdrawal to cash.

Participation in any rights offering, dividend distribution or stock split will
be based upon both the Shares of the Fund registered in participants' names and
the Shares (including fractional Shares) credited to participants' Program
accounts. Any stock dividend or Shares resulting from stock splits with respect
to Shares of the Fund, both full and fractional, which participants hold in
their Program accounts and with respect to all Shares registered in their names
will be automatically credited to their accounts.

All Shares of the Fund (including any fractional share) credited to his account
under the Program will be voted as the participant directs. The participants
will be sent the proxy materials for the annual meetings of shareholders. When a
participant returns an executed proxy, all of such Shares will be voted as
indicated. A participant may also elect to vote his Shares in person at the
Shareholders' meeting.

A participant will receive tax information annually for his personal records and
to help him prepare his U.S. federal income tax return. The automatic
reinvestment of dividends does not relieve him of any income tax which may be
payable on dividends. For further information as to tax consequences of
participation in the Program, participants should consult with their own tax
advisors.

The Program Administrator in administering the Program will not be liable for
any act done in good faith or for any good faith omission to act. However, the
Program Administrator will be liable for loss or damage due to error caused by
its negligence, bad faith or willful misconduct. Shares held in custody by the
Program Administrator are not subject to protection under the Securities
Investors Protection Act of 1970.

- --------------------------------------------------------------------------------
27
<PAGE>
DESCRIPTION OF INVESTLINK* PROGRAM (CONTINUED)

The participant should recognize that neither the Fund nor the Program
Administrator can provide any assurance of a profit or protection against loss
on any Shares purchased under the Program. A participant's investment in Shares
held in his Program account is no different than his investment in directly held
Shares in this regard. The participant bears the risk of loss and the benefits
of gain from market price changes with respect to all of his Shares. Neither the
Fund nor the Program Administrator can guarantee that Shares purchased under the
Program will, at any particular time, be worth more or less than their purchase
price. Each participant must make an independent investment decision based on
his own judgment and research.

While the Program Administrator hopes to continue the Program indefinitely, the
Program Administrator reserves the right to suspend or terminate the Program at
any time. It also reserves the right to make modifications to the Program.
Participants will be notified of any such suspension, termination or
modification in accordance with the terms and conditions of the Program. The
Program Administrator also reserves the right to terminate any participant's
participation in the Program at any time. Any question of interpretation arising
under the Program will be determined in good faith by the Program Administrator
and any such good faith determination will be final.

Any interested investor may participate in the Program. To participate in the
Program, an investor who is not already a registered owner of the Shares must
make an initial investment of at least $250.00. All other cash payments or bank
account deductions must be at least $100.00, up to a maximum of $100,000.00
annually. An interested investor may join the Program by reading the Program
description, completing and signing the enrollment form and returning it to the
Program Administrator. The enrollment form and information relating to the
Program (including the terms and conditions) may be obtained by calling the
Program Administrator at one of the following telephone numbers: First Time
Investors--(800) 969-3294; Current Shareholders--(800) 730-6001. All
correspondence regarding the Program should be directed to: The First National
Bank of Boston, InvestLink Program, P.O. Box 1681, Boston, MA 02105-1681.

- ---------------------------------------------
*InvestLink-SM- is a service mark of Boston EquiServe Limited Partnership.

- --------------------------------------------------------------------------------
28
<PAGE>
SUMMARY OF GENERAL INFORMATION

The Fund--The Emerging Markets Infrastructure Fund, Inc.--is a closed-end,
non-diversified management investment company whose shares trade on the New York
Stock Exchange. Its investment objective is long-term capital appreciation
through investments primarily in equity securities of infrastructure companies
in emerging countries. The Fund is managed and advised by BEA Associates
("BEA"). BEA is a diversified asset manager, handling equity, balanced, fixed
income, international and derivative based accounts. Portfolios include
international and emerging market investments, common stocks, taxable and
non-taxable bonds, options, futures and venture capital. BEA manages money for
corporate pension and profit-sharing funds, public pension funds, union funds,
endowments and other charitable institutions and private individuals. As of
March 31, 1997, BEA managed approximately $28.6 billion in assets.

SHAREHOLDER INFORMATION

The market price is published in: THE NEW YORK TIMES (daily) under the
designation "EmgMkt" and THE WALL STREET JOURNAL (daily), and BARRON'S (each
Monday) under the designation "EmergMktInfr". The Fund's New York Stock Exchange
trading symbol is EMG. Weekly comparative net asset value (NAV) and market price
information about The Emerging Markets Infrastructure Fund, Inc.'s shares are
published each Sunday in THE NEW YORK TIMES and each Monday in THE WALL STREET
JOURNAL and BARRON'S, as well as other newspapers, in a table called "Closed End
Funds."

THE BEA GROUP OF FUNDS

LITERATURE REQUEST - Call today for free descriptive information on the
closed-end funds or a prospectus on any of the open-end mutual funds listed
below. The prospectus contains more complete information, including fees,
charges and expenses, and should be read carefully before investing or sending
money.

<TABLE>
<S> <C>
CLOSED-END FUNDS BEA ADVISOR FUNDS
SINGLE COUNTRY OPEN-END MUTUAL FUNDS
The Brazilian Equity Fund, Inc. (BZL) BEA Emerging Markets Equity Fund
The Chile Fund, Inc. (CH) BEA Global Telecommunications
Fund
The First Israel Fund, Inc. (ISL) BEA High Yield Fund
The Indonesia Fund, Inc. (IF) BEA International Equity Fund
The Portugal Fund, Inc. (PGF)
MULTIPLE COUNTRY
The Emerging Markets Telecommunications Fund, Inc. (ETF)
The Latin America Equity Fund, Inc. (LAQ)
The Latin America Investment Fund, Inc. (LAM)
For shareholder information or a
copy
FIXED INCOME of a prospectus for any of the
BEA Income Fund, Inc. (FBF) open-end mutual funds please
call,
BEA Strategic Income Fund, Inc. (FBI) 1-800-401-2230.

For closed-end fund information Visit our website on the
internet:
please call, 1-800-293-1232. http://www.beafunds.com
</TABLE>

- --------------------------------------------------------------------------------
<PAGE>
DIRECTORS AND CORPORATE OFFICERS

William W. Priest, Chairman of the Board of Directors
Jr.

Richard W. Watt President, Chief Investment Officer
and Director
Dr. Enrique R. Arzac Director

James J. Cattano Director

Peter A. Gordon Director

George W. Landau Director
Martin M. Torino Director
Stephen M. Swift Senior Vice President and
Investment Officer

Paul P. Stamler Senior Vice President

Michael A. Pignataro Chief Financial Officer and
Secretary
Rachel D. Manney Vice President and Treasurer

Wendy S. Setnicka Assistant Treasurer

INVESTMENT ADVISER
BEA Associates
One Citicorp Center
153 East 53rd Street
New York, NY 10022

ADMINISTRATOR

Bear Stearns Funds Management Inc.
245 Park Avenue
New York, NY 10167

CUSTODIAN

Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109

SHAREHOLDER SERVICING AGENT

The First National Bank of Boston
P.O. Box 1865
Mail Stop 45-02-62
Boston, MA 02105-1865

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103

LEGAL COUNSEL

Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022

This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. The financial
information included herein is taken from the records of the Fund
without examination by independent accountants who do not express an
opinion thereon. It is not a prospectus, circular or representation
intended for use in the purchase or sale of shares of the Fund or of
any securities mentioned in this report. [LOGO]

- --------------------------------------------------------------------------------
3918-SA-97