Cordiant Capital to manage IFC’s infrastructure debt pool

Montreal-based Cordiant Capital will review and make investments on behalf of the Infrastructure Crisis Facility Debt Pool formally launched at the October meeting of the World Bank. Investors in the pool include the German Government, the European Investment Bank and Proparco.

Cordiant Capital, a Canadian private equity firm, will manage an infrastructure debt pool that is being raised by the World Bank’s International Finance Corporation to ease the shortage of funds for infrastructure projects in emerging countries.

The debt pool, part of a larger $10 billion Infrastructure Crisis Facility created earlier this year to combat the impact of the credit crisis in emerging markets, was formally launched at the World Bank’s annual meeting in October. Its goal will be to fill the financing gap caused by the withdrawal of lenders from the emerging markets during the financial crisis by lending to selected infrastructure projects.

As the debt pool’s manager, Cordiant will review investment opportunities and bring them to the attention of the debt pool’s board. Once approved, Cordiant will negotiate and execute the legal documents for the deal, disburse the funds and manage the investment on behalf of the pool’s contributors, according to a statement.

The contributors so far include a large number of governments, banks and international development organisations. The German government has agreed to provide a €70 million interest subsidy for the pool and contributed $11 million in equity. German Bank KfW Entwicklungsbank will contribute €500 million to the pool under a guarantee from the German government. Proparco, the French Investment and Promotions Company for Economic Cooperation, has pledged €200 million and the European Investment Bank has committed €1 billion. Additionally, a KfW subsidiary has set aside $400 million for co-financing opportunities.

Other investors may also get a chance to co-invest with the fund. Cordiant said it would offer pension fund investors co-investment opportunities in individual projects backed by the pool.

The pool has already begun to finance projects. It has invested in SP-SSA International Container Services, a joint venture between Vinalines, Saigon Port and Carrix, Inc. to develop a container cargo handling terminal in Ho Chi Minh City, Vietnam.

Overall, the IFC’s Infrastructure Credit Facility, which includes pockets for project debt, equity and advisory services financing, has attracted $4 billion of commitments, according to the statement. It was launched in April with $2 billion in commitments from the German and French governments.

Montreal-based Cordiant invests private equity and debt in emerging markets. It was founded by former BMO Nesbitt Burns executive David Creighton and former investment advisor AMI veteran Carl Otto in 1999. The firm has raised $2.4 billion across five emerging market-focused funds since its founding, according to the statement.

Cordiant currently co-manages one private equity fund – the $212 million Canadian Investment Fund for Africa – and three private debt funds, according to the statement.