The International Finance Corporation (IFC) is investing $50 million in equity to bolster A.P. Moller Capital‘s $1 billion Emerging Markets Infrastructure Fund II (EMIF II), joining forces with a consortium of global partners.
IFC said in a statement on Monday that the new investment will help address critical infrastructure gaps, facilitate trade, and boost access to renewable energy in Asia and Africa, helping support job creation, foster gross domestic product (GDP) growth and tackle significant challenges such as food poverty, supply chain disruptions, and climate change.
According to the statement, approximately 50 percent of the fund will be invested in each of Africa and South and Southeast Asia.
Approximately 60 percent of the fund will focus on onshore transport infrastructure (ports and storage, roads and rail, warehouses and distribution), promoting job creation and improving competitiveness.
The remaining 40 percent will be directed towards renewable energy, as well as distribution infrastructure.
“This partnership is an excellent opportunity to further our ethos of ‘doing well while doing good’ as we look to increase sustainable investments in green energy and transport in high growth markets in Asia and Africa,
“We have made it a priority to work with partners who are as invested as we are to build sustainable businesses that seek to support society through economic and social development,” said Kim Fejfer, Managing Partner and Chief Executive Officer at A.P. Moller Capital.
According to the statement, the fund is also committed to mitigating climate change, with a target to reduce greenhouse gas emissions by at least 25 percent in its transport infrastructure assets.
It is noted transport contributed approximately 25 percent of global energy-related greenhouse gas emissions in 2022 and is one of the fastest-growing sources of emissions.
Meanwhile, a recent report by IFC and the International Energy Agency underscored the need for emerging markets to commit $2.8 trillion annually to clean energy by the early 2030s—tripling current investment levels—to align with the Paris Agreement.
According to the statement, emerging economies have typically suffered from chronic underinvestment in their transport networks, hampering their socio-economic development.
Meanwhile, persistent underinvestment means that despite accommodating more than half of the world’s population in 2022, Africa, Southeast Asia and South Asia together represent only 16 percent of the world’s total primary energy consumption.
Over the last decade, IFC has committed and mobilized over $10 billion to finance sustainable transport projects spanning ports, shipping, rail, logistics, and urban transit in emerging markets.
Since 2010, IFC also deployed $12 billion from its own account and mobilized an additional $20 billion for energy projects in these markets.
In addition, IFC has financed over 22 gigawatts of renewable energy, pioneering commercially viable business models in the process.
The agreement is also aligned with the World Bank Green, Resilient and Inclusive Development (GRID) agenda.
A.P. Moller Capital is an infrastructure fund manager focused on critical infrastructure investments within transportation and energy transition.
A part of the A.P. Moller Group, A.P. Moller Capital makes investments aimed at tackling food poverty, supply chain disruptions and global warming i.e., the need to decarbonize hard-to-abate sectors.
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets.
The organization works in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries.
In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.