IFC considers $50m investment in Brazilian fund

The World Bank’s financing arm is exploring the possibility of committing $50m to GP Investimentos’ infra fund.

The International Finance Corporation, the private-sector investment arm of the World Bank Group, is considering a $50 million commitment to GP Infra Fund, which is currently being raised by Brazilian alternative asset manager GP Investimentos.

The vehicle is a 12-year closed-end equity fund with a target of $750 million that will invest in six to 10 infrastructure projects primarily in Brazil, IFC said in a statement.

The IFC’s board of directors is expected to make a decision on March 26.

While GP Investimentos focuses primarily on private equity, its other lines of business include infrastructure and real estate.

Since its inception in 1993, the firm has raised $5 billion from investors worldwide and has completed investments in more than 50 companies, according to its website.

As for infrastructure specifically, the Brazilian firm’s realised investments in the asset class include Brazilian rail company Ferrovia Centro-Atlantica, cargo transport and logistics company America Latina Logistica and Equatorial Energia.

For many investors, Brazil is one of the most attractive emerging markets worldwide in great part due to the ambitious $121 billion logistics programme the country’s president Dilma Roussef announced in 2012. However, the country’s reputation has suffered in various degrees due to delays in meeting deadlines for World Cup-related infrastructure last year, postponing projects, as well as on-going corruption scandals.

On Wednesday, the BBC reported that the country’s Supreme Court has asked that 54 people – including politicians – be investigated in connection with a kick-back scheme at Petrobras, the state-owned oil company.

Last December, the city of Providence in Rhode Island filed a lawsuit against Petrobras for investor losses stemming from the corruption scandal.

One analyst recently told Infrastructure Investor that their firm was never bullish on the country. “Roussef will either have to clean up the corruption or implement the logistics programme; but she can’t do both,” the person said.

Established in 1956, IFC is the largest multilateral source of loan and equity financing for private sector projects in the developing world. Its activities include providing capital to private equity and venture capital funds that target these regions.

According to Infrastructure Investor's Research & Analytics, the IFC has invested in 37 unlisted infrastructure funds, predominantly geared towards emerging markets. The IFC also makes direct investments into public infrastructure and is a strong participator in public-private partnerships (PPPs; P3s).The organisation provided more than $22 billion in financing during fiscal year 2014.