Allianz Group has signed a partnership deal with International Finance Corporation (IFC) to provide loans for infrastructure projects to be carried out in emerging markets. IFC is a member of the World Bank Group, and it is a global development institution targeting infrastructural investments. The partnership comes under the Managed Co-Lending Portfolio Program (MCPP). MCPP is an IFC program which allows institutional investors assist with the IFC’s future loan portfolio. Allianz Group will provide $500 million that will be invested with IFC’s debt financing. The deal is a step towards addressing the investment shortfall in emerging markets. “Modern infrastructure is essential for economic growth and lasting prosperity,” said IFC CEO Philippe Le Houérou. “Yet, a huge investment gap exists in this sector—totaling trillions of dollars a year in emerging markets alone. MCPP infrastructure marks a breakthrough in the search for large-scale financing solutions to the challenges of development. It is a key building block in the global effort to move from billions to trillions in development finance.”
Allianz Global Investors are currently operational in 18 countries, so this investment provides them the opportunity to get involved in more countries without the burden of management. The loans will be disbursed by the IFC, which will also be providing first loss protection. IFC hopes more companies will partner with the MCPP. The CEO of Allianz Group Oliver Bäte said, “We work to ensure that our activities are profitable and sustainable. We create long-term value by embedding sustainability in our core business. The partnership with IFC and our co-investment in infrastructure is a perfect example how Allianz can provide thought leading investment expertise to support the economic development of emerging countries as well as serving the interest of our customers.” Infrastructural investments in emerging markets for FY16 was $19 billion. Allianz Group’s infrastructure debt team has $9.7 billion in assets under management. It is hoped that if successful, the company will devote more resources to the project.