International Finance Corporation (IFC), the private lending arm of the World Bank Group, has pledged to invest up to $200 million in its Emerging Asia Fund (EAF), which reached its first close last week.
The investment instrument aims to fund private companies across multiple sectors in Asia to boost growth and investment in the region, IFC said in a statement.
Joining the IFC as investment partners are Korea Development Bank (KDB) and Fiji National Provident Fund (FNPF).
Investments made by the EAF will be aligned to IFC’s strategy to address the infrastructure deficit in East Asia and the Pacific region. It will support invested companies in raising operational standards, improve risk mitigation and generate value.
“We are excited by the equity opportunities we see in emerging Asia and delivering further development impact through our clients,” said Vivek Pathak, regional director East Asia and Pacific, IFC. “We are very pleased that major institutional investors such as KDB and FNPF are partnering with us to further IFC’s support of private sector development.”
Raising additional capital in emerging markets of the Asia region is important to spur sustainable growth in many low and middle income countries in the region. The public sector companies lag in innovation, technological development and employment creation. This has made the private sector “central to finding and financing the development solutions that are needed,” the IFC said.
Asia, the largest continental economy by GDP in the world, is also home to two-thirds of the world’s poorest people. Governments in the East Asia and the Pacific region have tried to bolster growth by investing in infrastructure, and committing to political and economic reform. These steps have led to emergence of a rapidly growing middle class.
“Combined, these dynamics have created significant opportunities for investment in the region including China, India, Indonesia, Philippines and Asian frontier markets such as Vietnam and Myanmar,” the IFC commented.
The IFC’s long-term investments for East Asia and the Pacific region totalled $3.3 billion last fiscal, among the $18 billion capital invested globally during the year.