The World Bank’s International Finance Corp. recently released new details of its Managed Co-Lending Portfolio Program for Infrastructure for emerging market investments. The Financial Times reports the fund has raised $6 billion, with more than half already approved for 87 infrastructure and financial investments in 39 emerging market countries since 2013 when the fund launched. Investors include insurance companies AXA, Prudential, Allianz, Munich Re and Liberty Mutual, each of which has invested about $500 million since 2013.
“Now the momentum is really building in terms of private sector money wanting to join the scheme,” Hua Jingdong, IFC vice president and treasurer, tells the Financial Times.
The investments are debt financing for infrastructure projects in the power, water, transportation and telecoms sectors. Investors commit a certain amount of capital in advance, to be invested alongside IFC funds within certain countries.
To attract more capital, the IFC, with its partner the Swedish International Development Corp., included a provision that allows it to take on more potential losses, which makes the risk profile more attractive to insurance company investors.
German insurer Allianz said in a statement that the IFC fund allowed its “investments to meet the risk-reward profile that institutional investors require”, reports the Financial Times.
“Investors appreciate our record in emerging market investing but won’t join these platforms unless IFC is also committed to the deals with its own balance sheet and capital,” Hua tells the Financial Times.
