The Emerging Africa and Asia Infrastructure Fund has completed its second major debt raising in little more than a year as the emerging markets infrastructure debt pioneer expands beyond its original focus on Africa and backing by development finance institutions.
The close, which brought EAAIF’s recent funding for on-lending to US$619m, came soon after the UK launched a new “Emerging Markets and Developing Economies Investor Taskforce”. The founder of EAAIF’s fund manager Ninety One, Henrik du Toit, serves as the taskforce's industry co-chair.
While still a blended finance package, EAAIF’s latest US$325m round is notable for its growing share of private-sector capital. Created in 2001 with equity from the Netherlands, Switzerland, Sweden and the UK, the fund – whose parent is the Private Infrastructure Development Group (a vehicle with the same donors as EAAIF plus Australia, Germany, Norway and the World Bank) – was originally funded chiefly by Germany’s KfW, with additional loans from the African Development Bank and Dutch DFI FMO.
The new round included just US$40m from public-sector sources (Sweden’s Swedfund), with the remainder coming from Allianz (€100m), the fund’s first institutional investor back in 2018; South Africa’s ABSA (US$75m); and Standard Bank and Sumitomo Mitsui Banking Corporation (US$50m each).
“We try to mobilise as much private-sector capital as we can as our mandate is providing private investors access to the EM infrastructure debt asset class,” said Martijn Proos, co-head of emerging market alternative credit at Ninety One.
Even so, he sees DFIs and multilateral development banks “still playing a role” in EAAIF for the foreseeable future due to their provision of longer-term debt (10 to 12 years) than bank lenders. While insurers can handle longer maturities too, EM infra debt remains a “nascent” asset class for institutional investors.
Standard’s new commitment added to the US$100m of sustainability-linked revolving credit and term debt facilities it provided in January 2024. While the biggest African lender is EAAIF’s only current SLL provider, the fund is converting another of its lenders’ facilities to this format too.
EAAIF operates under PIDG’s climate policy with “strong” commitments to sustainable lending and reporting, Proos said. More than 50% of its lending – mainly senior secured, though it also offers unsecured, subordinated and mezzanine debt – is committed to climate finance and more than 70% of its lending to the power sector (the majority of its US$1.6bn portfolio) is in renewable energy projects.
The new round was the first since EAAIF added Asia to its remit (and name) in October. It has since made its first investments in the region in Pakistan (sustainable aviation fuel) and Vietnam (rooftop solar) and also has deals underway in Bangladesh, India, Indonesia, the Philippines and Sri Lanka.
While Africa remains EAAIF’s core market, Asia (where other PIDG entities such as GuarantCo are also active) could soon rise from its current 5% share of the portfolio to as much as 30%. The region offers a notably wide range of bankable projects, including electric vehicles and social infrastructure.
With further borrowing capacity against its US$600m equity base and a recently affirmed A2 credit rating from Moody’s, EAAIF may diversify its funding by issuing private placements or bonds. Although its loans match its assets’ maturities well, “the fund is getting to a scale where a loan note programme might become an option”, Proos said.
Practical solutions
The new UK taskforce combines investors with the Foreign, Commonwealth and Development Office and HM Treasury, plus the UK development finance institution British International Investment. Besides Ninety One and PIDG, other participants include Aviva, Border to Coast, Church of England Pensions, HSBC, Legal & General, Lloyds, Nest, People’s Pension, Phoenix and S&P.
The Institutional Investors Group on Climate Change will provide a secretariat for the taskforce, which aims to develop “practical solutions such as capacity building and product innovation to overcome barriers that currently constrain long-term private capital from investing at scale into climate, transition and sustainable investment opportunities in [EM] regions”, according to a statement.
While institutional investment in EM has focused on public equities and sovereign debt, du Toit added that “a just and effective energy transition requires a significant increase in private equity, private debt, project finance and corporate capital” too.