PIIF IFC Partnership

The following is an extract from the IFC press release:

IFC, a member of the World Bank Group, has signed an agreement with pension, provident and sovereign funds who are members of the Pacific Islands Investment Forum (PIIF), with the aim of helping bridge the infrastructure investment gap in the region.

The funds who are members of PIIF play a critical role in their economies. PIIF’s membership collectively own more than $8 billion worth of assets. It’s estimated the infrastructure gap in the region amounts to US$45 billion over 12 years. 

And with COVID-19 bringing a wave of unprecedented volatility across the world, a first step of the new agreement is for IFC and PIIF to conduct a survey to understand the impact of the pandemic on PIIF fund members.

“During times of crisis, PIIF member funds are regularly called upon to provide economic and social support across a range of areas,” PIIF chairman and Samoa National Provident Fund CEO, Pauli Prince Suhren said. “So we aim to share the results of this survey among our member funds as we adapt in this unprecedented environment. We’re also working with IFC to help achieve our long- term vision of cross-border investment in the region, to deliver better infrastructure and services and, most importantly, better returns for the people who’re members of our funds.”  

The co-operation agreement with IFC will allow PIIF to explore co-investment opportunities with IFC and also opportunities for funds to go beyond their own borders and invest in other countries’ industries, services and infrastructure.

“In the Pacific these funds play a dominant role in financial systems and are major employers, so it’s important not only to assess the impact now of COVID-19, but also to look to the future and work on ways to allow for greater co-investments across the Pacific,” IFC Country Manager – Australia, New Zealand, Papua New Guinea and the Pacific Islands, Thomas Jacobs said. “We must ensure the interest of the members of the funds is paramount, and that future investments are low cost with the right level of risk and suitable to the needs of pension fund members.” 

While co-investment brings two major benefits to PIIF members- improved infrastructure and services and better returns, some funds will first have to address their regulatory bottlenecks that prevent them from investing overseas.

“We believe that first by gathering and sharing information in this manner, the Pacific region’s funds will bolster their approach to handling the economic impacts of the outbreak,” IFC Senior Financial Sector Specialist, Aaron Levine said. “At the same time, we have the opportunity to use our global expertise to help PIIF member funds achieve their long-term goal of branching out across the Pacific and delivering better returns for workers.” 

Working with the World Bank Group’s Finance, Competitiveness & Innovation Global Practice has enabled PIIF to benefit from global experience and best practices.

“We are working with PIIF to develop the most appropriate co-investment platform option for the Pacific,” said Ekaterina M. Gratcheva, Lead Financial Officer. “We are drawing on global experience and knowledge to bring the best approaches.” 

The assistance to PIIF is supported by the Pacific Partnership, through which the governments of Australia, New Zealand and IFC work to stimulate the private sector and reduce poverty.