APG and Achmea, under the flag of ILX Management B.V. (ILX), participate in a new partnership with the African Development Bank (AfDB). The cooperation agreement aims to stimulate investments and capital injections by institutional investors for sustainability projects in African countries. These projects focus on the UN's Sustainable Development Goals and the climate.
With the new agreement, ILX aims to mobilize capital to support the AfDB's loans to the private sector in 54 African member states. The AfDB is the leading African development finance institution. This new partnership enables investments across Africa for ILX's European pension fund participants.
1 billion dollar
ILX’s investors are the Dutch pension asset managers APG Asset Management and Achmea Investment Management, with other Dutch and European pension fund participants expected to join in future in ILX funds. ILX Fund I provides a scalable USD 1 billion private credit investment strategy to be deployed across emerging and developing countries, co-financing with global Multilateral Development Banks (MDB) and other DFIs.
The cooperation arrangement enables the African Development Bank to deliver on its ambition to mobilize financial resources from institutional investors to bridge the significant financing gap required to meet the Bank’s High Five priorities: Light up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa and Improve the quality of life for the people of Africa. This partnership will allow the Bank and ILX to support non-sovereign operations in these key priority sectors. The High 5s are intrinsically linked to the SDGs.
At the same time, the arrangement offers ILX Fund pension fund participants the opportunity to benefit from the AfDB’s long-standing track record of successfully investing in key economic sectors across Africa. All loan investments are SDG or Climate Finance-focussed while offering attractive risk-adjusted returns, combined with robust environmental, social and governance (ESG) safeguarding.
APG Asset Management, on behalf of ABP and bpfBOUW, together with Achmea Investment Management (on behalf of Pensioenfonds Vervoer) have committed USD 1,050 million to Emerging Market private credit fund ILX Fund I, to invest in four key economic sectors; energy access & clean energy, sustainable industry & infrastructure, inclusive finance and food security. ILX invests in loan participations arranged by the Multilateral Development Banks (MDBs) and other leading DFIs in support of their SDG and Climate focused projects across the Emerging Markets and Developing Economies.
ILX received grant funding in its development phase from: KfW, the German Development Bank, on behalf of the Federal Ministry of Economic Cooperation and Development (BMZ); the Netherlands’ Ministry of Foreign Affairs; and the UK Foreign, Commonwealth and Development Office. They strongly supported ILX's role in mobilising large scale pension fund capital for the leading MDBs and other DFIs in support of their SDG and climate-finance-related investments in emerging markets.
A very welcome step
Hassatou N'Sele, Vice President and Chief Financial Officer of the African Development Bank Group, commented: “We are very pleased to be partnering with ILX to mobilize institutional capital with a Sustainable Development Goals focus. Our objectives are aligned, and the African Development Bank has a strong track record of structuring and financing projects with a strong development impact.”
Manfred Schepers, Founder and CEO of ILX, said: “We are delighted to have established this strategic partnership. The launch of this partnership demonstrates AfDB’s strong commitment to engage actively with European pension funds, as a key partner in its mobilization effort and contribution to sustainable growth across the African continent. We look forward to a long-term partnership with AfDB on behalf of our pension fund investors, which are becoming key counterparts to finance SDG and climate-finance projects across the emerging markets.”
Kitty van der Heijden, Director-General for International Cooperation, Dutch Ministry of Foreign Affairs, The Netherlands said: “With this agreement, Dutch pension funds, ILX and the African Development Bank join hands to increase investments in the SDG and climate goals on the African continent. A very welcome step, as the challenges in achieving the SDGs, and the need to integrate the global climate commitments in African countries’ development pathways, are more urgent than ever.”