British International Investment (BII) has signed a Memorandum of Understanding (MoU) with Amsterdam-based ILX Management, an SDG and climate-focused emerging market private debt fund.
BII is the UK's Development Finance Institution (DFI) and impact investor.
In a statement on Monday, BII said the MoU is a sign of their shared intent to co-finance up to $500 million of debt transactions.
They said the finance is to facilitate long-term sustainable development across developing economies and low-income countries in Africa, Asia, and the Caribbean.
Through their CEO Nick O’Donohoe, they said the partnership has been driven by their 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 just 3 per cent of private credit globally, and is the natural next step for allocators of global private credit,” he said.
The statement said BII and ILX will invest across a broad range of sectors including renewable energy, infrastructure, financial services, manufacturing and agribusiness to increase the flow of capital into impactful businesses and projects.
The new partnership will enable both parties to leverage each other’s expertise and provide additional financial firepower across Africa, Asia and the Caribbean.
ILX management CEO Manfred Schepers said they have already received over $1 billion in commitments from leading Dutch pension funds.
He said with this they are currently raising a successor fund for a targeted $2 billion commitment from European pension funds.
“Working with BII, together we will increase financial capacity for project finance, financial services debt and private sector debt across Africa, Asia and the Caribbean. 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 and look forward to the opportunities this partnership will bring,” Schepers said.
ILX and BII are also set to 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 in scalable businesses.
On his side, UK Minister for Development and Africa Andrew Mitchell said the partnership will mobilise up to $500 million of additional finance for low-income countries.
He said it will help in improving access to renewable energy and quality infrastructure and helping businesses to thrive
“This MoU with ILX is an example of BII’s pioneering approach to mobilising the private finance needed to deliver the UN Sustainable Development Goals. I am proud that FCDO provided early-stage funding to ILX, which went on to secure over $1 billion in commitments to its first investment fund,” he said.
