IFC targets $1b fundraising within a year as part of $5b vehicle

A man takes pictures of a flower display set up ahead of the Belt and Road Forum in central Beijing, China, May 10, 2017. Photo: Reuters

The World Bank’s International Finance Corporation (IFC) aims to raise an extra $1 billion within a year as part of a planned $5 billion infrastructure investment fund, an official said, with China’s Belt and Road programme offering more opportunities.

IFC this year raised $1.1 billion from Allianz and Eastspring Investments, the Asian asset management business of Prudential, IFC Chief Investment Officer for infrastructure and natural resources Ram Mahidhara said.

The fundraising plans are part of IFC‘s so-called Managed Co-Lending Portfolio Program (MCPP) that seeks to raise a little over $5 billion from investors by 2021, a large part of which is expected to be deployed for Belt and Road related projects.

Launched in 2013, the Belt and Road project is aimed at building a modern-day “Silk Road”, connecting China by land and sea to Southeast Asia, Pakistan and Central Asia, and beyond to the Middle East, Europe and Africa.

A major part of the private investments in the 68 countries officially linked to President Xi Jinping’s signature foreign policy are expected to be in the energy and infrastructure sectors, analysts have said.

“We have raised the first $1.1 billion, we are going to raise the next billion probably within the next year, that’s my guess,” Mahidhara told Reuters in an interview at the sidelines of a Belt and Road summit in Hong Kong.

“The second set of raising should be much faster than the first set … We have got quite a few people who have said they want to put money,” he said, adding that the IFC has received interest from insurers as well as sovereign wealth funds.

While the IFC official declined to disclose how much of the total of $5 billion would be invested in Belt and Road related projects, he said the agency would deploy capital in those infrastructure projects that meet its criteria.

“The problem is not how much money is going to be available for Belt and Road, the problem is we have to find a structure (that is) bankable, commercially viable,” he said. “That is the critical aspect.”

He said the financing shortfall in infrastructure projects globally was mainly due to the ratings mismatch. A vast majority of projects fell short of the rating requirements of investors in developed markets which held 80 percent of funds available for infrastructure, he added.

“Around $110 trillion dollars is available with institutional investors with 80 percent sitting in developed markets,” he said, adding that 80 percent of the projects were in developing markets.

“A lot of the infrastructure investment in developing countries are not in investment grade category or in categories that insurers or pension funds can park in.”

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.