Impact investor BlueOrchard and the International Finance Corporation (IFC), a member of the World Bank Group, have teamed up on a private debt vehicle that aims to raise $2bn (£1.5bn) for emerging market credit.

Tokio Marine Group was the anchor investor in the $300m first close of the evergreen fund. The vehicle is aimed at institutional investors, including pension funds, insurers and sovereign wealth funds.

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“Emerging markets need trillions of dollars to invest in their development, far more than public finance can supply,” said Makhtar Diop, managing director of the IFC.

“This initiative with BlueOrchard and Tokio Marine Group creates a scalable way to connect institutional capital with businesses that create jobs, expand opportunities and improve lives in the places that need it the most.”

Investors will be able to subscribe and redeem on an ongoing basis, subject to predefined redemption windows, while capital is continuously recycled into new investments, the firms said.

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The launch comes as institutional investors show growing interest in emerging market private credit. Private credit in developed markets, by contrast, has come under mounting scrutiny over credit quality concerns, with parts of the sector hit by outflows.

BlueOrchard and the IFC said emerging markets debt had strengthened significantly over the past two decades, supported by improved regulation, stronger governance and falling default rates.

The fund forms part of the IFC’s Managed Co-Lending Portfolio Program, which launched in 2013 and has more than $25.5bn in capacity.

Read more: BlueOrchard launches Impact Credit Fund