An organisation set up to foster economic growth among Islamic countries has set up a partnership with a Dutch asset manager to address the “growing food security concerns” in some of its member states.
The Islamic Development Bank, a Jeddah-based organisation set up to aid economic growth among 56 member countries, has launched an agriculture-focused private equity fund in partnership with Dutch asset manager Robeco.
The IDB, through its affiliate Islamic Corporation for the Development of the PrivateSector, will use the fund to target a range of business opportunities in the sector alongside third parties including privatisations and growth capital investments.
The fund will have a traditional private equity structure with a 10-year lifespan and a five-year investment period with a target of $600m. The IDB expects to hold a first close of $350m by the end of the year having received strong interest from several investors, according to the spokesman.
Khalid Al-Aboodi, the chief executive of ICD, said: “The fund is the first public private partnership of this nature and size to address the inefficiencies and wastage facing the food and agricultural sector throughout our member countries.
“Boosting regional food production, supply and trade, the fund’s investments will also lead to creation of jobs, transfer of technology, promotion of sustainable practices and poverty alleviation. The fund will significantly benefit from ICD’s standing and resources in the Islamic countries”.
The IDB was founded in 1973 and now has 56 member countries throughout Africa and Asia with regional offices in Morocco, Malaysia, Kazakhstan and Senegal.
The ICD was launched by the IDB in 1999 with a mandate to support the economic development of its member countries through the provision of finance to private sector projects in accordance with the principles of the Shari’a law.
To date, ICD has, through its own balance sheet and managed funds, extended financing and investment commitments of over US$2bn to 205 projects according to its website.
--write to Kiel Porter at kiel.porter@dowjones.com
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