BaltCap, the largest private equity investor in the Baltic region, has launched BaltCap Infrastructure Fund (BIF) with the planned size of €100 million (US$114 million).

BaltCap Infrastructure Fund will primarily focus on providing development capital for transport, energy, and energy efficiency infrastructure projects in the Baltic States. The fund will invest into infrastructure development across Lithuania, Latvia, and Estonia.

The anchor investor of the fund is the European Investment Bank (EIB), which has committed to invest €20 million (US$23 million) into the fund. This EIB support is guaranteed under the European Fund for Strategic Investments (EFSI), a central element of the Juncker’s Commission Investment Plan for Europe launched to overcome the current invetsment gap in the EU by mobilising private financing for strategic investments.

Other investors of the BaltCap Infrastructure Fund are Nordic Environment Finance Corporation, pension funds of SEB, Swedbank, and LHV, Swedbank Life Insurance, as well as other institutional investors. It is the largest combined local pension funds commitment to the Baltics focused private equity fund to date.

BaltCap Infrastructure Fund investment strategy is based on the highest environmental, social and governance standards and climate change mitigation criteria. The fund has a duration of 20 years.

This is a second fund launched by BaltCap this year. Recently BaltCap Growth Fund with the target size of €50 million was established to provide growth capital across the Baltic region for small and medium-sized (SME) companies.

BaltCap Infrastructure Fund partner Šarūnas Stepukonis, said:

“Infrastructure development is one of the key priority areas for the region to improve its competitiveness and independency. Baltic countries are facing infrastructure funding gap of €6 billion over the next 5 years which is expected to become even larger post 2014-2020 EU funding program. Physical infrastructure such as electricity, heating, railways, roads, ports and airports suffer from a substantial deficit in terms of capacities and efficiencies.”

“With the strong support from international financial institutions and local pension funds we are able to address the infrastructure funding gap and help Lithuania, Latvia and Estonia to realise their infrastructure investments programs. It is the first time in the region when the local pension fund assets will be deployed to develop infrastructure for future generations.”