Dutch asset managers APG and Achmea have announced they will be participating in a new partnership with the African Development Bank (ADB) to facilitate loans for sustainable projects in Africa.

Through APG and Achmea’s collaboration, known and ILX Management B.V., the agreement aims to stimulate investments and capital injections by institutional investors for projects that focus on the UN’s Sustainable Development Goals (SDG) and the climate.

ILX will seek to mobilise capital to support the ADB’s loans to the private sector in 54 African member states and enables investments across Africa for ILX’x European pension fund participants.

APG and Achmea are the current investors in ILX, with other Dutch and European pension fund participants expected to join in future ILX funds.

APG Asset Management, on behalf of ABP and BpfBouw, and Achmea Investment Management, on behalf of Pensioenfonds Vervoer, have committed USD 1.05bn to emerging market private credit fund ILX Fund I to invest in four key economic sectors.

These sectors are: Energy access and clean energy, sustainable industry and infrastructure, inclusive finance, and food security.

ILX Fund I will provide a scalable USD 1.05bn private credit investment strategy to be deployed actoss emerging and developing markets, co-financing with global multilateral development banks and other development finance institutions.

The collaborative arrangement aims to enable the ADB to mobilise financial resources from institutional investors to bridge the financial gap required to meet its five priorities: light up and power Africa; feed Africa; industrialise Africa; integrate Africa; and improve the quality of life for the people of Africa.

The partnership will also allow the bank and ILX to support non-sovereign operations in these sectors.

Furthermore, the arrangement offers ILX Fund pension fund participants the opportunity to benefit from investments in key economic sectors across Africa.

All loan investments are SDG or climate finance-focused and aim to offer attractive risk-adjusted returns.

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; the Netherlands’ Ministry of Foreign Affairs; and the UK Foreign, Commonwealth and Development Office.

Commenting on the agreement, ADB vice president and chief financial officer, Hassatou N'Sele, said: “We are very pleased to be partnering with ILX to mobilise institutional capital with a SDG focus.

“Our objectives are aligned, and the ADB has a strong track record of structuring and financing projects with a strong development impact.”

Dutch Ministry of Foreign Affairs director-general for international cooperation, Kitty van der Heijden, added: “With this agreement, Dutch pension funds, ILX and the ADB 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.”

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