STOCKHOLM Aug 4 Sweden and the United States want to work to encourage pension funds to invest in Africa by creating new investment vehicles which could be backed by guarantees, the Swedish finance minister said on Monday.
Anders Borg was speaking after Sweden and the United States co-hosted a roundtable discussion about institutional and long-term investments in Africa at a U.S.-Africa summit in Washington.
He also suggested some easing of global financial regulations may be needed to support pension funds' investments in Africa.
"It must be very easy and it must involve a small number of instruments or funds which one can invest in, and then the World Bank or the African Development Bank takes responsibility for the implementation," Borg said on a telephone conference from Washington.
In the face of low returns on investments such as government bonds there were plenty of areas in Africa ripe for investment. African clean energy was one area where pension funds could also help the continent develop faster, Borg said.
He said Sweden and the United States, as well as the World Bank or the African Development Bank, could provide different forms of guarantees to ensure investments comply with regulations.
He hoped other countries such as Germany, the Netherlands and France could follow suit.
Borg said he would meet with the U.S. Treasury officials to talk about the possibility of initiating discussions within the G20 group of major economies or the Financial Stability Board - which coordinates financial regulation for the G20 economies - about easing financial regulations for this kind of investment, so that regulatory frameworks such as the Solvency 2 EU insurance regulations would not stand in the way.
He did not elaborate on what kind of regulatory changes were needed but said the first investments through the funds could possibly be made in the second quarter of next year. (Reporting by Daniel Dickson; Editing by Susan Fenton)