The Czech National Bank issued a licence for the National Development Fund SICAV (“NDF”). This will enable the participation of private capital on infrastructure financing in the Czech Republic. Board of Directors of NDF together with potential private investors have already started to identify and assess potential infrastructure projects for financing. Beside the Czech-Moravian Guarantee and Development Bank (ČMZRB), four commercial banks as private investors joined this initiative: Česká spořitelna, Komerční banka, Československá obchodní banka and UniCredit Bank Czech Republic and Slovakia. Other private investors can join NDF in future.
“National Development Fund is one possible answer to the question how to involve private finance in the construction of public infrastructure,” the Minister of Industry and Trade Karel Havlíček says and welcomes the licence for NDF. He adds: “This form of financing lowers the volume of money from public sources, which is needed to realize infrastructure projects. As a result, these projects become of greater interest for banks and other investors such as pension funds or insurance companies.”
Four commercial banks, which have been participating on NDF from the start, promised to invest into NDF-sponsored projects CZK 7 billion (app. EUR 266 million). We expect that this could trigger other private financing and that NDF will be able to support projects worth of CZK 35 billion.
NDF aims to support both public and private infrastructure projects such as highways, railways, hospitals, retirement homes, university campuses or affordable housing. “Board of Directors of NDF together with potential private investors have already started to identify and assess first potential infrastructure projects to be financed by NDF,” says CEO of ČMZRB Jiří Jirásek and adds: “However, finalization of these project proposals and their realization will necessarily take some time. What is important for the moment is that ČMZRB together with commercial banks have established the institutional framework, which will enable financing of infrastructure projects.”
NDF was created in September 2019, when the Czech government and four commercial banks signed a memorandum. “Licence from the Czech National Bank ended a difficult preparatory phase of NDF. Now we can concentrate on the substance: to enable cooperation between public sector and private investors on financing the strategic and future-oriented projects such as digitalization, education or transport infrastructure. NDF is ready now and we as co-investors are ready to start discussing the investment potential of the respective project proposals,” says Tomáš Salomon, president of the Czech Banking Association and CEO of Česká Spořitelna.
NDF is managed by the Board of Directors (Jan Barta, Filip Drapák and Lenka Zíb Novotná). Supervisory Board consists of three renowned and experienced financial market representatives (Jiří Kunert, Marek Ditz and Petr Kratochvíl). NDF is advised by the National Investment Council, which will give its opinion on strategic issues such as the investment strategies of the respective sub-funds. Council consists of four members representing the state, four members representing the founding private investors and one independent expert, former vice-president of the European Investment Bank. Council is chaired by Pavel Kysilka, other members are Daniel Heller, Vazil Hudák, Petr Zahradník, Radek Špicar, Jitka Haubová, Miroslav Zámečník, Jan Troják and Aleš Barabas.