ImpactA Global has raised over $200m (£152m) for a fund that seeks to tackle the infrastructure deficit in emerging markets.
Existing investor L&G, which committed up to $100m to the firm in October 2023, is joined by new commitments from UK government programme, Mobilist, as well as the private sector arm of the Inter-American Development Bank Group, IDB Invest and other private investors.
“Channelling capital into private debt financing for emerging markets is crucial to closing the $4tn annual funding gap and achieve the UN sustainable development goals,” said Hannah Gore-Randall, managing director of alternative finance, asset management at L&G.
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“We believe this investment shortfall also offers investors the opportunity to benefit from the potential for strong returns and diversification to their portfolios that exposure to emerging markets can provide. Our early support of ImpactA Global and provision of catalytic capital is one example of how we aim to achieve our dual goals of delivering commercial returns alongside positive social and environmental outcomes.”
ImpactA Global is a women-led emerging markets infrastructure debt investor that seeks to solve funding gaps in transformational infrastructure projects.
The investment firm cited data from the International Environment Agency that suggests emerging markets need between $2.2tn and $2.8tn of clean energy investment annually by the early 2030s, while McKinsey analysis outlines that $1.1tn of this investment will need to be provided by international capital sources.
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The sector also presents lucrative opportunities for investors. Returns on infrastructure debt in emerging markets were double that of developed markets over a 10-year period, coming in at eight per cent versus four per cent, according to GI Hub data cited by ImpactA.
The firm said it will deploy capital alongside the official sector and multilateral agencies who aid in de-risking through the provision of revenue guarantees, insurance, and other credit enhancement support.
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“We are thrilled with the support and collaboration, from both public and private institutions for this important initiative,” said Isabella da Costa Mendes, co-founder and co-chief executive of ImpactA Global.
“Through such collaborations, we are providing global investors the confidence to diversify their allocations. We are hugely motivated to address this market gap and demonstrate the quality of outcomes from investing into emerging markets.”
