The European Bank for Reconstruction and Development (EBRD), the European Union, and ILX Management, an emerging market asset manager, have joined forces to enhance private-sector finance in Emerging Europe, under a partnership announced at the EBRD Annual Meeting on May 17 in Samarkand.
This collaboration aims to facilitate co-financing by European pension funds, including Dutch funds, with an anticipated investment of up to €300mn over the next three years, the EBRD announced.
The funds will contribute to sustainable development, focusing on climate-smart solutions, digital transformation, and financial inclusion for projects that lack private-sector involvement.
The European Fund for Sustainable Development Plus (EFSD+) Guarantee Programme will provide EU guarantees to support these investments. Through the EFSD+ guarantee structure, ILX will be able to co-invest with the EBRD while maintaining the same risk-return profile.
The project will target Eastern Europe, the Caucasus, the Western Balkans, Turkey, the Southern and Eastern Mediterranean (SEMED) and Central Asia.
This partnership will provide ILX with a broader range of highly impactful investment opportunities in EBRD countries of operation that directly contribute to the sustainable development goals (SDGs) in emerging markets. ILX is currently managing ILX Fund I, which invests on 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.
“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 ILX to increase further the participation of private institutional investors in support of key shared strategic objectives,” said EBRD President Odile Renaud-Basso.
European Commission Executive Vice President Valdis Dombrovskis said that the partnership “sets down a new marker in development finance”.
“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,” Dombrovskis said at the signing ceremony.
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