The International Finance Corporation (IFC), a member of the World Bank Group, has committed a $50 million equity investment in the Emerging Markets Infrastructure Fund II (EMIF II), totaling $1 billion. Managed by A.P. Moller Capital, the fund aims to address critical infrastructure gaps, promote trade, and enhance access to renewable energy in high-growth markets across Asia and Africa. The investment aligns with IFC’s commitment to sustainable development, job creation, and tackling challenges such as food poverty, supply chain disruptions, and climate change.
Key Points:
- Investment Details:
- IFC is investing $50 million in equity to support EMIF II, a $1 billion fund managed by A.P. Moller Capital.
- The fund targets critical transport infrastructure and renewable energy projects in select high-growth markets in South and Southeast Asia and Africa.
- Geographical Focus:
- Approximately 50 percent of the fund will be allocated to each of Africa and South and Southeast Asia.
- The fund’s focus includes onshore transport infrastructure (ports, roads, rail, warehouses) contributing to job creation and competitiveness (60 percent), and renewable energy and distribution infrastructure (40 percent).
- Climate Mitigation Commitment:
- EMIF II aims to be a Net Zero Fund by investing in renewable energy and reducing greenhouse gas emissions by a minimum of 25 percent in its transport infrastructure assets.
- Transport is identified as a significant contributor to global energy-related greenhouse gas emissions, and the fund aims to address this challenge.
- Climate Change Context:
- Transport accounted for approximately 25% of global energy-related greenhouse gas emissions in 2022 and is among the fastest-growing sources of emissions.
- The partnership aligns with the need for emerging markets to commit $2.8 trillion annually to clean energy by the early 2030s to meet the Paris Agreement goals.
- Infrastructure Investment Need:
- Emerging economies, despite hosting over half of the world’s population, represent only 16 percent of the world’s total primary energy consumption due to persistent underinvestment in transport networks.
- IFC’s investment aims to address chronic underinvestment in transport networks, fostering socio-economic development in these regions.
- IFC’s Track Record:
- Over the last decade, IFC has committed and mobilized over $10 billion for sustainable transport projects and deployed $12 billion for energy projects in emerging markets.
- The agreement is in line with the World Bank Green, Resilient, and Inclusive Development (GRID) agenda.
The IFC’s investment in EMIF II underscores its commitment to fostering sustainable development, addressing infrastructure gaps, and promoting renewable energy in high-growth markets of Asia and Africa. The partnership aims to contribute to job creation, economic development, and climate change mitigation, aligning with global goals and the World Bank’s development agenda. EMIF II’s focus on becoming a Net Zero Fund further emphasizes the importance of climate-conscious investments in the infrastructure sector.
