The partnership will co-finance up to $500m of debt transactions to facilitate long-term sustainable development across Africa, Asia, and the Caribbean.
British International Investment (BII), the UK’s development finance institution, has signed a memorandum of understanding (MoA) with Amsterdam-based ILX Management (ILX), an SDG and climate-focused emerging market private debt fund.
This new partnership is intended to enable both parties to leverage each other’s expertise and provide additional financial firepower. ILX and BII will share information on prospective projects, emerging technologies, and financial innovation. They will also establish a roadmap to mobilise private sector capital, specifically focusing on providing institutional investors with greater access to high-impact private debt investment opportunities.
ILX Management is the Amsterdam-based manager of ILX Fund I, an emerging market focused private debt fund that invests in loan participations originated and structured by multilateral development banks and other development finance institutions. It was created with grant support from the German Federal Ministry of Economic Cooperation (KfW), the Netherlands’s Directorate General for International Cooperation and the UK Foreign, Commonwealth and Development Office.
Manfred Schepers, CEO, tells Impact Investor: “ILX invests in all emerging market regions and has four sector focus areas: renewable energy; infrastructure and sustainable industry; inclusive finance and food security. The partnership with BII will focus on countries where they are active in financing key sustainable development projects, across southeast Asia, sub-Saharan Africa and the Caribbean”.
He went on to add: “In the Netherlands we have €1,05bn commitments for ILX Fund I from three pension fund investors including APG Asset Management on behalf of ABP, the Netherlands largest pension fund.” ILX is currently raising a successor fund for a targeted $2bn of commitments from European pension funds.
“We have a strong track record of investing alongside the leading multilateral development banks and other development finance institutions in climate, and SDG-targeted projects across emerging economies globally,” Schepers said.
This latest deal fits in well with BII’s overall strategy. In 2022, 46% of BII’s commitments were in climate finance. It invested £591m to help emerging economies reduce emissions, protect the environment and adapt to the changing climate. It has previously pledged that over the next five years, at least 30% of BII’s total new commitments by value will be in climate finance.
Nick O’Donohoe, CEO of BII, said: “This partnership has been driven by our shared view of the need to invest to meet the SDGs. It furthers our ambition to create new job opportunities in developing economies and will provide private credit to help bridge the finance gap faced by many businesses. This asset class remains nascent, comprising of just 3% of private credit globally, and is the natural next step for allocators of global private credit.”