Insurance giant Allianz Group have agreed to invest $500 million into global infrastructure projects, alongside debt financing from the International Finance Corporation (IFC).
Allianz are investing with the IFC into their Managed Co-Lending Portfolio Program, which is focused on emerging markets worldwide. IFC will originate, structure and administer the loans on behalf of the fund in addition to providing a first loss protection.
Oliver Bäte, CEO of Allianz SE, said it was imperative that the activities are “profitable and sustainable”, creating “long-term value” for the business.
“The partnership with IFC and our co-investment in infrastructure is a perfect example how Allianz can provide thought leading investment expertise to support the economic development of emerging countries as well as serving the interest of our customers.”
The IFC will provide a first loss protection in order to reflect the risk/reward profile of an institutional investor, offering Allianz insurance entities access to Emerging Markets infrastructure loans, which have historically been funded by international development institutions, local banks and some international banks only.
“Modern infrastructure is essential for economic growth and lasting prosperity,” said IFC CEO Philippe Le Houérou. “Yet a huge investment gap exists in this sector—totalling trillions of dollars a year in emerging markets alone. MCPP Infrastructure marks a breakthrough in the search for large-scale financing solutions to the challenges of development. It is a key building block in the global effort to move from billions to trillions in development finance.”
Allianz’s Chief Investment Officer Andreas Gruber said the partnership would create real value for customers, combining entrepreneurial investment ideas with “industry-leading implementation know-how.”
“Together with IFC we were able to conceive a reliable investment vehicle appropriate to the very long-term perspectives of all parties involved”, he added.
IFC is one of the largest global development institutions focused on the private sector in emerging markets, and currently works with 2,000 businesses worldwide.