The Islamic Development Bank Group has held a $750m first close for one of the world’s largest funds aimed at sparking infrastructure development across the Middle East and Africa.
The fund’s $2bn target is almost triple the $730m IDB raised for its first infra vehicle, which achieved a healthy 18 per cent IRR and 1.7 times multiple gain.
LP returning to back the latest vehicle include Saudi Arabia’s Public Pension Agency and Public Investment Fund and the ministries of finance of Bahrain and the Sultanate of Brunei Darussalam.
IDB tapped the debut vehicle for investments including Malaysia-based AirAsia, Saudi International Petrochemical Company and AES Oasis, as well as power assets in Pakistan, Oman and Jordan.
IDB estimates Fund II will support the development of $24bn of infrastructure products in the 57 member countries of the IDB. They include Saudi Arabia and Libya with the most subscribed shares and the Indian Ocean island of Comoros with the least.
It said target investments would include oil and gas, mining and logistics assets as well as a smaller allocation for healthcare, education, and financial services.
The development bank and the founding investors have established a Bahrain-based multi-fund asset management platform called ASMA Capital Partners to manage the vehicle.
Saudi Arabian Public Pension Agency governor Mohammed Al-Kharashi said, “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.”
The launch of the fund coincides with the 40th anniversary of the bank.
The Islamic Development Bank launched a $50m renewable energy investment fund to finance projects in Central Asia in October 2012.
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