Eastspring invests US$500m into IFC Emerging Markets scheme
Eastspring Investments is to raise US$500m for an International Finance Corporation (IFC) program, that mobilizes funds from investors, to fund much-needed infrastructure projects in emerging markets regions.
Eastspring, the Asian asset management business of insurance giant Prudential, is the first Asian investor to participate in the program, known as MCPP Infrastructure.
The program seeks to raise US$5bn, mainly from global institutional investors, to modernise infrastructure in emerging markets by 2021, opening up a new stream of capital flows to improve power, water, transportation, and telecommunications systems in developing countries.
A signing ceremony was hosted by Norman Chan, chief executive of the Hong Kong Monetary Authority (HKMA), earlier this week.
“Trillions of dollars a year are required to bridge the infrastructure gap in emerging markets, and it is impossible for the public sector alone to fulfil such needs without substantially drawing in private sector capital,” said Chan. “Through the IFFO platform, we look forward to collaborating more closely with public and private sector stakeholders, with a view to developing a more conducive environment in Hong Kong for facilitating infrastructure investment and financing.”
‘Emerging markets infrastructure’
The MCPP Infrastructure is designed for investors seeking to increase their exposure to emerging markets infrastructure. Through the program, IFC originates, approves, and manages a portfolio of loans that mirrors IFC’s own portfolio in infrastructure.
With support from the Swedish International Development Cooperation Agency (Sida), IFC provides a limited first-loss guarantee on the program’s investments to meet the risk-reward profile that institutional investors require.
The other first mover partnership under the MCPP Infrastructure program is with the global insurance company Allianz, IFC said.
“Building sustainable infrastructure strengthens economies, allows for cross-border business, and helps create new markets,” said IFC vice president and treasurer, Jingdong Hua. “This new partnership with Eastspring will help bring reliable power, roads, and other critical infrastructure to areas where they are urgently needed.
“IFC will continue to work with governments and investors to mobilize additional resources for infrastructure development in developing countries.”