Scaling up investments in emerging economies

Ladies and gentlemen,
It’s an honour to open this session. Thank you all for being here.

It is unique to have senior representatives from all the multilateral development banks, from development finance institutions, pension funds, asset managers and governments in one room. We are here to discuss how we can scale up investment in development finance across emerging markets and developing economies.

We meet at a time of profound geopolitical change. Economic power is shifting. Global competition is growing. And international relationships can no longer be taken for granted.

The areas of diplomacy, trade and international cooperation are increasingly connected. For the Netherlands, this calls for more strategic international and multilateral cooperation. 

This also means we must strengthen existing partnerships and build new ones. In this effort, private investments in emerging markets and developing economies are essential.

Countries like South-Africa, Kenya and Nigeria, with their young populations, a growing middle class and critical resources, will increasingly play a bigger role in our future. And countries like India, Vietnam and Indonesia already generate much of the world’s economic growth in the years ahead.  

All of them looking for cooperation, on an equal footing, on trade and investments. Demand for climate-resilient infrastructure, clean energy and agriculture is rising fast. This creates major investment opportunities. Yet, investing in these markets is not always straightforward.

The multilateral development banks have an incredible track record and decades of experience in these markets. You have a vital role in unlocking more private capital. The Dutch government appreciates your leadership on this agenda. 

The question for today is how we turn that opportunity into scalable and investable propositions for institutional investors.

And the good news is, we know this can work. Because it’s already happening.
Last spring I was in Washington DC, at the signing of a transaction between the African Development Bank and ILX, for Egypt’s largest wind power producer. 

That single project will generate 4,100 gigawatt-hours of clean electricity every year, enough to power millions of homes. Egypt gains energy security. Dutch pension holders gain access to an attractive investment opportunity. And the African Development Bank mobilises private pension capital for a major, bankable project. I am proud that the Netherlands is part of it.

I see a clear win-win. We can deliver growth, jobs and opportunities for emerging economies. And provide access to growing markets for institutional investors.

Today, I want to focus on our shared interests, on what’s already working, and on what it will take to scale up.       

So let me set a goal on the horizon. Because these times call for realism AND ambition. 

European pension funds manage nearly ten trillion euros. Imagine if one per cent of that were invested in emerging market development finance.
Hundred billion euros that could finance clean energy, green infrastructure, new businesses and jobs, for millions of people. And a solid return for pension holders across Europe. 
As well as hundred billion euros of new ties between Europe and the fastest-growing countries in the world, at precisely the moment those ties matter most. Making it a true investment in our common welfare. 
The Netherlands is well placed to help lead that effort. Our prosperity is built on being open, on connecting capital to opportunity wherever it is found. We have one of the largest pension sectors in the world, a deep expertise in development finance, and a strong tradition of financial innovation. 
And Dutch pension funds are not talking about this from the sidelines. They are already doing it.
The Dutch government wants to support this effort. 
By supporting innovations, like ILX. By deploying our diplomatic role. And by facilitating exchanges like these. 
Not to convene yet another talking shop – sorry for being frank. Your time is too valuable for that.
And not to push you into investments you do not see merit in. I realize that pension funds are looked at for a number of challenges, in the social, economic and recently also security domain. It is not my intention to add another ask to that list.    
I am talking about working together to realize win-wins. Each of us have our own reality and restrictions. Our goal is to help bridge those realities and deepen understanding. To discuss win-win opportunities, and real solutions, with the people who know best. And to come to concrete actions.
[In this regard, I am particularly pleased with the new Achmea Investment Management – ILX Partnership. This will enable more Dutch pension funds to participate in this attractive development finance private debt opportunity. A major step.]
Another promising step concerns local-currency finance. We heard from you that this is an important topic. So I’m pleased to announce that the Netherlands will support a feasibility study into how to make investments in local currency private debt more accessible for institutional investors. Many thanks  to Cardano Development and ILX for taking this important research forward.

Also key and very concrete, is: better and more transparent data. The imminent publication of new return data from the Global Emerging Markets Risk Database (GEMs). This is a great achievement. Thanks to GEMs, the World Bank Group, FMO and all of the multilateral development banks and DFI’s that made it possible. 

We need to spread the word and bring it to investors’ attention. The Dutch government is pleased to host a key GEMs event during the forthcoming World Bank annual meeting in Bangkok, together with the UK government, the World Bank and ILX.
These are shared efforts. There are more positive steps, by a number of you, and I am pleased that we will hear and discuss them today. 

So let’s use this meeting to identify what pension funds need, what development banks and finance institutions can offer, and where we can act together.

Ladies and gentlemen,

As far as I am concerned, this is not a one-off. The Dutch government is here to support and strengthen your efforts.

If we succeed, partner countries gain investment and opportunities. Institutional investors gain access to attractive markets. And development banks increase their impact.
That is the triple win. And an opportunity worth taking.

Thank you.