Eastspring Investments, the Asian asset management business of UK insurer Prudential, has signed a deal in Hong Kong to invest $500m (€440m) in emerging markets infrastructure debt alongside the World Bank’s International Finance Corporation (IFC).
Under the deal, which includes first-loss protection for the investor, IFC will originate transactions and provide Eastspring with co-lending opportunities, it was announced.
Virginie Maisonneuve, CIO of Eastspring Investments, said: “This partnership enables us to make a significant contribution to the economies and communities of developing countries while investing in infrastructure projects that deliver compelling returns for our clients.”
The investment is part of IFC’s MCPP Infrastructure programme, under which it is aiming to raise $5bn from international institutional investors to modernise infrastructure in emerging markets by 2021.
Eastspring Investments is the first Asian investor to take part in the programme.
In October, Allianz Group announced it was investing $500m via the managed co-lending portfolio programme.
Jingdong Hua, IFC’s vice president and treasurer, said the new partnership with Eastspring would help bring reliable power, roads, and other critical infrastructure to areas where they were urgently needed.
“IFC will continue to work with governments and investors to mobilise additional resources for infrastructure development in developing countries,” he said.
To meet the risk-reward profile required by institutional investors, IFC is providing a limited first-loss guarantee on the programme’s investments, with the support of the Swedish International Development Cooperation Agency (Sida), the parties said.
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.