The Islamic Development Bank has launched the USD2 billion Islamic Development Bank Infrastructure Fund II, the largest private equity infrastructure fund dedicated to the 57 member countries of the IDB.
The IDB Fund II is supported by the Public Pension Agency of the Kingdom of Saudi Arabia, the Public Investment Fund of the Kingdom of Saudi Arabia, the Ministry of Finance of the Kingdom of Bahrain and the Ministry of Finance of the Sultanate of Brunei Darussalam as founding investors, with aggregate commitments totalling USD750 million for the first closing.
A final closing with additional investors is targeted for early 2015.
The IDB Fund II is the successor to the USD730 million IDB Infrastructure Fund I (the IDB Fund I), also supported by the founding investors, which achieved an IRR of 18 per cent and an investment multiple of 1.7 times across signature projects such as AirAsia in Malaysia, Saudi International Petrochemical Company (SIPCHEM) in Saudi Arabia and AES Oasis Ltd with power assets in Pakistan, Oman and Jordan.
HE Dr Ahmad Mohamed Ali says: "Building on the successful track record of IDB Fund I, the IDB and founding investors are nearly tripling the size of the IDB Fund II to USD2 billion. The fund will mobilise up to USD24 billion of aggregate financing to support the development of key infrastructure projects in IDB member countries."
IDB and the founding investors have established ASMA Capital Partners, based in the Kingdom of Bahrain, as a multi-fund asset management platform to manage the IDB Fund II.
HE Mohammed Al-Kharashi, vice chairman of ASMA Capital, says: "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 IDB Fund II will have a broad sectorial focus beyond core infrastructure sectors of power, telecommunications, transportation, and will include investment in oil and gas, refinery and petrochemicals, steel and aluminium, mining, logistics and an allocation for healthcare, education, and financial services.
