Infranode closes second investment round for infrastructure fund

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Infranode closes second investment round for infrastructure fund

Infranode has announced the closing of its second investment round. The Infranode I investment platform raises SEK1.9 billion (US$213 million) dedicated to essential infrastructure investments in the Nordics.

It brings the total capital raised to date to SEK3.35 billion (US$375 million).

Investors participating in the second closing include Swedish insurance company and pension investment manager Folksam or the municipal sector insurance and pension company KPA Pension. Other investors are the European Investment Bank (EIB) and IMAS Foundation.

The European Union will also support investments into local infrastructure in the Nordic countries through the Infranode I investment platform, as the European Investment Bank (EIB) signed a SEK900 million (US$100 million) commitment in the platform. The operation is the first Nordic private infrastructure investment platform to be guaranteed under the European Fund for Strategic Investments (EFSI), an EU guarantee mechanism promoting crucial investments which is part of the Investment Plan for Europe of the European Commission.

Infranode finalized its first investment round in 2014, having raised SEK1.45 billion (US$162 million) from cornerstone investor IMAS Foundation.

The Nordic infrastructure market has a significant investment need that is expected to reach US$210 billion over the coming 10 years. Sweden’s investment backlog is expected to reach €77-110 billion (US$82 - 117 million) by 2025. Sveriges Kommuner och Landsting (SKL) calculates that the overall cost for Swedish municipalities will exceed income by SEK 47 Bn by 2020.

Infranode plans a final closing in 2017 in order to reach the investment platform’s target of SEK4 billion (US$448 million).

Infranode co-founder and partner Christian Doglia, said:

“We are very proud to get such strong support from institutional investors as the EIB, Folksam and KPA Pension. There is a gap between the need for infrastructure development and the public sector’s ability to invest. Infranode has a 25 year investment horizon and we are therefore unique in the Nordic market by aligning long-term investors and the public sector in working towards a common vision and goal. We can bridge the gap between long term investors seeking stable returns in infrastructure and the public sector’s time perspective and ability to invest, as we share the same goals and incentives,  making us the most suited partner for the public sector.”

Infranode co-founder and partner Philip Ajina, commented:

“Infranode will tap into this market primarily targeting public and private small and mid-sized infrastructure assets in the Nordics. We work with investors who favour a truly long-term investment approach with lower risk and stable cash yields.”

Jens Henriksson, President and CEO of Folksam said:

“We are very pleased to be able to participate in this investment with Infranode, as it allows us to grow our exposure in infrastructure. By engaging in these types of investments we hope to safeguard good, long-term returns to our customers. It also feels particularly good to team up with other long-term and well-respected co-investors.”

Jan Vapaavuori, EIB Vice-President, commented:

“The Nordic infrastructure market has a significant investment backlog and faces limited funding opportunities. Many of these projects are relatively small, making it challenging for the EIB to directly support them. It is thanks to Infranode acting as a local intermediary that we can lend our financial support here and improve peoples’ lives. The EFSI guarantee is another important catalyst for our first ever long-term equity injection in a local platform in Sweden.” 

Petter Odhnoff, CIO at IMAS Foundation, said:

“We believe that investing in infrastructure is, in addition to generating a stable long term return, an important way to play an active and responsible role in helping improve our society.  That’s why IMAS Foundation decided to be the first investor in Infranode I. It’s therefore great to see that significant partners are now joining us on this investment platform, providing patient capital for needed Nordic infrastructure investments.”

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