Eastspring Investments, the Asian asset management business of UK insurer Prudential, has signed an agreement with World Bank‘s International Finance Corporation to invest $500 million in emerging markets infrastructure.
According to an official statement, Eastspring is the first Asian investor to participate in the programme, known as MCPP Infrastructure, which mobilises funds from institutional investors for infrastructure projects in emerging markets. The programme is aimed at opening up a new stream of capital flows to improve power, water, transportation, and telecommunications systems in developing countries.
MCPP Infrastructure is designed for institutional investors seeking to increase their exposure to emerging markets infrastructure. Through the programme which is supported by Swedish International Development Cooperation Agency, IFC originates, approves, and manages a portfolio of loans that are similar to its own portfolio in infrastructure.
In October, Allianz Group announced it was investing $500 million through the managed co-lending portfolio programme.
Under the deal, which includes first-loss protection for the investor, IFC will originate transactions and provide Eastspring with co-lending opportunities in all deals that fit with Eastspring’s investment strategy.
“Building sustainable infrastructure strengthens economies, allows for cross-border business, and helps create new markets,” IFC Vice President and treasurer Jingdong Hua said.
“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 mobilise additional resources for infrastructure development in developing countries,” Hua added.
Tony Adams, infrastructure CIO at Eastspring Investments, said the partnership’s structure broke new ground in providing a credit enhanced platform for Eastspring’s clients to participate in a portfolio of emerging market infrastructure loans.
“It also develops our access and capability to lend directly to compelling infrastructure projects,” he said.
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