The, European Union (EU), the European Bank for Reconstruction and Development (EBRD) and emerging-market asset manager ILX Management are partnering to boost private-sector finance in Eastern Europe, the Caucasus, the Western Balkans, Türkiye, the Southern and Eastern Mediterranean and Central Asia.
The partnership is expected to facilitate co-financing by Dutch and other European pension funds of up to €300 million over the next three years. The investments will bolster the finance available for sustainable development, particularly in climate-smart solutions, digital transformation and financial inclusion for projects that would otherwise not have benefited from private-sector participation. They will be supported by EU guarantees through the European Fund for Sustainable Development Plus (EFSD+) Guarantee Programme. The EFSD+ guarantee structure will enable ILX to co-invest with the EBRD with the same risk-return profile.
The EBRD is working to enhance its partnerships with private institutional investors in its countries of operation, to support its goal of doubling private co-financing by 2025. This partnership is an important part of that process.Developing greener, more inclusive and more digital economies lies at the heart of the Bank’s work in all the regions where it operates.
Mobilising private sector capital is also central to the European Union’s Global Gateway strategy, which aims todeliver large-scale investments of €300 billion in sustainable and high-quality projects by 2027. This strategy will support partner countries in their green and digital transition, as well as in achieving the United Nations Sustainable Development Goals (SDG).
This partnership will provide ILX with a broader range of highly impactful investment opportunities in EBRD countries of operation that directly contribute to the SDGs in emerging markets. ILX is currently managing ILX Fund I, which investson behalf of leading Dutch pension-fund managers, including APG Asset Management. Other Dutch and European pension-fund participants are expected to join future ILX funds.
EBRD President Odile Renaud-Basso said: “The ability to bring our core partners together for greater impact to support and develop the private sector is a key strength of the EBRD. I am delighted that we have been able to forge this dynamic partnership with the European Commission and ILXto increase further the participation of private institutional investors in support of key shared strategic objectives. It is testimony to our track record of successfully supporting our clients, no matter how difficult the circumstances, by investing in key economic sectors that deliver impactful, long-lasting socioeconomic change.
European Commission Executive Vice President Valdis Dombrovskis said: “I welcome this partnership with the EBRD and ILX, which sets down a new marker in development finance – a new model that can inspire other international financial institutions and private investors to step up sustainable and green investment. Backed by the EU budget guarantee, and together with the EBRD and ILX, we will boost private capital to our partner countries to €300 million for projects that are aligned with our policy and development objectives. It will demonstrate that placing capital for such investments in emerging markets can be done at a lower risk than might be expected. And it is a model we intend to build on in future.”
Manfred Schepers, CEO of ILX, said: “We are delighted to have established this important partnership with the EU and EBRD, which will enable ILX to invest in private-sector projects in central and eastern Europe, the Caucasus, the southern and eastern Mediterranean and Central Asia on behalf of our European pension-fund investors. By partnering with the EBRD and being able to benefit from the same riskmitigation in these private-sector projects that support the EFSD+ strategic objectives, we will be able to directly contribute to sustainable development and climate-related investments in the EBRD regions. We look forward to this long-term partnership with the EBRD and EU and to investing on behalf of European pension funds, which are becoming key investors in sustainable development across emerging markets.”
About ILX Management B.V.
ILX Management B.V. is an Amsterdam-based emerging-market private credit asset manager that invests in loans originated and structured by multilateral development banks and other development finance institutions. ILX provides large-scale investment opportunities in global development finance that contribute directly to the SDGs in emerging markets and developing economies. ILX Fund I has received commitments of US$ 1.05 billion from leading Dutch pension providers, including APG Asset Management, the Netherlands’ largest pension provider. ILX invests in four key economic sectors:energy access and clean energy, sustainable industry and infrastructure, inclusive finance and food security. ILX was created with grant support from the German Federal Ministry of Economic Cooperation (KfW) on behalf of the German Ministry for Development Cooperation (BMZ), the Netherlands’ Directorate General for International Cooperation and the UK Foreign, Commonwealth and Development Office.
- Publication date
- 17 May 2023
- Directorate-General for Neighbourhood and Enlargement Negotiations