Swedfund bullish on infra following €40m EAAIF investment
Sweden’s development finance institution Swedfund is bullish on sustainable infrastructure and believes that these investments can bridge the financing gap in developing countries.
Last month, Swedfund committed €40m (£33.21m) to the Emerging Africa & Asia Infrastructure Fund (EAAIF), a company of the Private Infrastructure Development Group (PIDG), managed by Ninety One. The investment aims to address infrastructure gaps in Africa, the Levant and South and Southeast Asia by supporting projects that elevate climate action and support inclusive and sustainable development.
“Infrastructure investments lend themselves well to debt financing (e.g. structure of cash flows, length of underlying contracts) and private credit is an important complement to the use of public funds,” Gunilla Nilsson, Swedfund’s investment director for energy and climate, told Alternative Credit Investor.
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“Infrastructure is also an asset class well-known to institutional investors. Helping to catalyse an increased amount of funding from such parties is key to bridging the financing gap that exists in developing countries.”
Nilsson added that the institution is committed to supporting sustainable infrastructure investments across multiple geographies, and it has identified Africa as the most energy-deficient continent.
Jérémie Hoffsaes from Swedfund’s Energy & Climate team, said that the EAAIF has a “crucial” role to play in financing impactful infrastructure projects across Africa, while also challenging risk perceptions around African infrastructure investments, and mobilising private capital.
“This is essential to close the financing gap and build capital markets to achieve better environmental and social impact,” Hoffsaes added.
Nilsson noted that Swedfund has a broad mandate for sustainable infra investments including renewable energy generation and distribution, digital infrastructure, and water and waste management.
“We focus on investments with a tangible and measurable impact including with respect to climate (both mitigation and adaptation),” she added.
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“Investing alongside like-minded partners and also contributing to capital mobilisation are key aspects. While we do have a wide geographical mandate, we seek to build a coherent portfolio over time, by assessing potential new opportunities on, amongst other criteria, how they map against our existing portfolio and our long-term strategy.”
EAAIF has been providing patient debt capital since 2001, and has built a portfolio of high impact infrastructure projects in Africa and Asia worth more than $2.5bn (£2bn).
Swedfund’s investments focus on climate-resilient infrastructure projects that support adaptation, facilitate net-zero transitions, and enhance digital connectivity.
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