The African Development Bank and ILX Management B.V. have a contract to increase investments in the regional members of the Bank Group.
The agreement, according to a statement from the bank, would also help institutional investors raise money for initiatives on the continent that are aimed at addressing climate change and the Sustainable Development Goals.
The signing ceremony took place at ILX Management’s offices in Amsterdam, the capital of the Netherlands.
APG Asset Management (on behalf of ABP and bpfBOUW) and Achmea Investment Management (on behalf of Pensioenfonds Vervoer) are two Dutch pension fund asset managers that have invested in ILX.
In the future, it is anticipated that additional Dutch and European pension fund members will join ILX successor funds.
Fund ILX I offers a scalable $1 billion private credit investment approach that may be implemented throughout emerging and developing nations with co-financing from other development finance institutions and multilateral development banks.
According to the announcement, the collaboration agreement will allow AfDB to raise money from institutional investors to close a sizable funding gap needed to accomplish its High Five priorities.
It had a list of priorities that included feeding Africa, industrializing Africa, integrating Africa, and enhancing the standard of living for Africans.
“The Bank and ILX will be able to support non-sovereign businesses in these important priority sectors thanks to this relationship. The SDGs and High 5s are inextricably related.
“At the same time, the arrangement gives investors in the ILX Fund pension fund the chance to gain from the AfDB’s long history of profitable investments in important African economic sectors.
According to the statement, “all loan investments are SDG or climate finance-focused while giving competitive risk-adjusted returns and strong environmental, social, and governance safeguards.”
The largest pension provider in the Netherlands, APG Asset Management, and Achmea Investment Management have pledged $1,050 million to the Emerging Market Private Credit Fund ILX Fund I, according to the release.
According to the statement, the fund will facilitate investments in four important economic sectors: clean energy access and infrastructure, inclusive finance, food security, and sustainable industry and infrastructure.
In order to promote initiatives aimed at achieving the SDGs and addressing climate change in emerging markets and developing countries, it was stated that ILX participated in loan participations set up by MDBs and other top DFIs.
Additionally, it stated that KfW, the German Development Bank, provided grants to ILX on behalf of the Federal Ministry of Economic Cooperation and Development (BMZ) during its development phase.
The UK Foreign, Commonwealth, and Development Office and the Ministry of Foreign Affairs of the Netherlands both backed ILX’s efforts to raise significant pension fund cash for the top MDBs and other DFIs.
“This supports their investments in emerging markets related to the SDGs and climate finance.
Vice president and chief financial officer of the AfDB, Hassatou N’Sele, stated: “We are delighted to be cooperating with ILX to mobilize institutional finance with a focus on the Sustainable Development Goals.
“Our goals are in line with one another, and the AfDB has a proven track record of creating and funding initiatives that have a significant positive impact on development.
In a similar vein, Manfred Schepers, the founder, and CEO of ILX, declared: “We are thrilled to have established this strategic collaboration.
“The establishment of this relationship shows AfDB’s steadfast commitment to work closely with European pension funds as a vital partner in its mobilization efforts and support to sustainable growth throughout the African continent.
“On behalf of our pension fund investors, who are emerging as important counterparts to finance SDG and climate-finance projects across the emerging markets, we look forward to a long-term partnership with AfDB.”
The relationship was also praised by Kitty van der at the Dutch Ministry of Foreign Affairs.
“Dutch pension funds, ILX, and AfDB will work together with this agreement to increase investments in the SDGs and climate goals on the African continent,” she said.
“A very welcome step, as the challenges in achieving the SDGs, and the need to incorporate the international climate commitments in the development pathways of African countries, are more urgent than ever.”