PE firm Cordiant Capital to manage debt pool for emerging markets infrastructure projects

The crisis has been caused by the withdrawal of major commercial financial institutions from emerging markets during the global economic downturn as they continue to refocus their lending activities on their home markets.

On a global basis, the International Finance Corporation, the private sector arm of the World Bank Group, estimates that approximately $110bn worth of new infrastructure projects risk delay or postponement, while $70bn worth of existing projects are facing refinancing. Emerging market infrastructure is facing long-term financing needs of $21tn over the next ten years, according to the IFC.

David Creighton, president and CEO of Montreal-based Cordiant, said, “New opportunities are arising in emerging markets as a result of the global liquidity crisis, which has caused a significant vacuum in the financing of new infrastructure projects. As manager of the ICF Debt Pool, Cordiant will enable vital support to promising infrastructure projects in emerging countries by ensuring they are financed on a timely basis, and on commercial terms. This role places us in a truly unique position to access deal flow and bring together public and private money to fund those projects.”

To date, the ICF Debt Pool has mobilised over $4bn from international financial and development institutions. The setting up of the fund, launched at the annual meeting of the World Bank Group in October, has been supported by the German government, which is providing a €700m interest subsidy and $11m equity participation. Under a guarantee of the German government, KfW Entwicklungsbank has set aside €500m for the ICF Debt Pool and Proparco, the French investment company for economic cooperation, has pledged €200m. KfW's daughter company DEG has earmarked $400m for co-financing opportunities, Proparco €800m and the European Investment Bank has committed €1bn.

As the manager of the fund, Cordiant will review all investment opportunities put forward by origination institutions.

The ICF Debt Pool has already committed to provide financing to several projects, including SP-SSA International Container Services, a joint venture between Vinalines, Saigon Port and Carrix Inc to develop a modern, efficient deepwater container-handling facility in Ho Chi Minh City, Vietnam.

Founded in 1999, Cordiant has invested almost $2bn in over 150 companies in more than 50 emerging and high growth countries around the world, including a large number of infrastructure investments. Cordiant co-manages one private equity fund, the Canadian Investment Fund for Africa, and manages three private debt funds.

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