Article summary
- The new agreement will mobilize institutional investor capital in support of AfDB’s private sector loan operations focused on African countries.
- Partnership to support the UN SDGs and climate finance-related targets enable investments in Africa for ILX’s European pension fund participants.
- AfDB is committed to mobilizing more private sector finance across Africa; ILX is a key partner in catalysing new SDG and Climate focused investments.
The African Development Bank (AfDB) and ILX Management B.V. have signed a partnership agreement to scale up investments and spur institutional investor capital mobilization for Sustainable Development Goals and climate-focused private sector projects in African countries.
A statement obtained by Nairametrics noted that the signing ceremony took place at the offices of ILX Management in the capital of the Netherlands, Amsterdam.
ILX’s investors are the Dutch Pension Fund Asset Managers, APG Asset Management (on behalf of ABP and bpfBOUW), and Achmea Investment Management (on behalf of Pensioenfonds Vervoer). Other Dutch and European pension fund participants in ILX successor funds are expected to join in the future.
ILX Fund I provides a scalable $1 billion private credit investment strategy to be deployed across emerging and developing countries, co-financing with global Multilateral Development Banks (MDB) and other DFIs.
Mobilising financial resources
The statement noted that the cooperation arrangement would enable AfDB to mobilise financial resources from institutional investors to bridge the significant financing gap required to meet its high five priorities.
It listed the priorities to include lighting up and powering Africa, feeding Africa, industrialising Africa, integrating Africa and improving the quality of life for the people of Africa.
- “This partnership will allow the Bank and ILX to support non-sovereign operations in these key priority sectors. The High 5s are intrinsically linked to the SDGs.
- “At the same time, the arrangement offers ILX Fund pension, fund participants the opportunity to benefit from the AfDB’s long-standing track record of successfully investing in key African economic sectors.
- “All loan investments are SDG or climate finance-focussed while offering attractive risk-adjusted returns, combined with robust environmental, social and governance (ESG) safeguarding,’’ it said.
$1,050 million to Emerging Market private credit: According to the statement, APG Asset Management, the Netherlands’ largest pension provider, and Achmea Investment Management have committed $1,050 million to Emerging Market private credit fund ILX Fund I.
It said the fund was to enable investment in four key economic sectors; energy access and clean energy; sustainable industry and infrastructure; inclusive finance and food security.
It said ILX invested in loan participations arranged by MDBs and other leading DFIs to support their SDG and climate-focused projects across emerging markets and developing economies.
It further said ILX received grant funding in its development phase from KfW, the German Development Bank, on behalf of the Federal Ministry of Economic Cooperation and Development (BMZ).
- “The Netherlands’ Ministry of Foreign Affairs and the UK Foreign, Commonwealth and Development Office all strongly supported ILX’s role in mobilising large-scale pension fund capital for the leading MDBs and other DFIs in support of their SDG and climate-finance-related investments in emerging markets,” it said.
What the partners said
Hassatou N’Sele, Vice President and Chief Financial Officer of the African Development Bank Group, said: “We are very pleased to be partnering with ILX to mobilize institutional capital with a Sustainable Development Goals focus. Our objectives are aligned, and the African Development Bank.”
Manfred Schepers, Founder and CEO of ILX, said: “We are delighted to have established this strategic partnership. The launch of this partnership demonstrates AfDB’s strong commitment to engaging actively with European pension funds, as a key partner in its mobilization effort and contribution to sustainable growth across the African continent. We look forward to a long-term partnership with AfDB on behalf of our pension fund investors, which are becoming key counterparts to finance SDG and climate-finance projects across the emerging markets.”
Kitty van der Heijden, Director-General for International Cooperation, Dutch Ministry of Foreign Affairs, The Netherlands said: “With this agreement, Dutch pension funds, ILX and the African Development Bank join hands to increase investments in the SDG and climate goals on the African continent. A very welcome step, as the challenges in achieving the SDGs, and the need to integrate the global climate commitments in African countries’ development pathways, are more urgent than ever.”
What you should know
The African Development Bank Group (AfDB) is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 44 African countries with an external office in Japan, the AfDB contributes to the economic development and the social progress of its 54 regional member states.
