IDB launches $2bn infrastructure fund
Jeddah, June 29, 2014
The Islamic Development Bank has launched a $2 billion infrastructure fund II (the IDB Fund II) to mark the 40th anniversary of the bank.
The IDB Fund II is the largest private equity infrastructure fund dedicated to the 56 member countries of the IDB, said a statement.
It is supported by the Public Pension Agency of Saudi Arabia, the Public Investment Fund of Saudi Arabia, the Ministry of Finance of Bahrain and the Ministry of Finance of Brunei Darussalam as founding investors, with aggregate commitments totalling nearly $750 million for the first closing.
A final closing with additional investors is targeted for early 2015, it said.
The fund follows the $730 million IDB Infrastructure Fund I (the IDB Fund I), also supported by the founding investors, which achieved an IRR of 18 per cent and an investment multiple of 1.7 times across signature projects such as AirAsia in Malaysia, Saudi International Petrochemical Company (Sipchem) in Saudi Arabia and AES Oasis with power assets in Pakistan, Oman and Jordan.
“Building on the successful track record of IDB Fund I, the IDB and founding investors are nearly tripling the size of the IDB Fund II to $2 billion. The fund will mobilise up to $24 billion of aggregate financing to support the development of key infrastructure projects in IDB member countries,” said Dr Ahmad Mohamed Ali.
IDB and the founding investors have established Asma Capital Partners, based in Bahrain, as a multi-fund asset management platform to manage the IDB Fund II.
The chairman of Asma Capital is the president of the IDB Group and the vice chairman is Mohammed Al-Kharashi, the governor of the Public Pension Agency of Saudi Arabia, also members of the board of directors are Abdullah Al Ayadhi representing the Public Investment Fund (Saudi Arabia) and Sami Humaid representing the ministry of finance of Bahrain.
“Asma Capital is expected to play a significant role in assisting pension funds and other global investors seeking to deploy capital into infrastructure projects in select emerging markets for portfolio diversification and stable return,” said Al-Kharashi.
The IDB Fund II will have a broad sectorial focus beyond core infrastructure sectors of power, telecommunications, transportation, and will include investment in oil and gas, refinery and petrochemicals, steel and aluminium, mining, logistics and an allocation for healthcare, education, and financial services. - TradeArabia News Service