French asset management company Amundi and IFC, a member of the World Bank Group, have launched the Amundi Planet Emerging Green One, said to be the world’s largest targeted green bond fund focused on emerging markets.
Some $1.42bn (€1.15bn) of inflows were raised for the fund, which is expected to pour $2bn (€1.62bn) into emerging markets green bonds over its lifetime (2018-2025). IFC brought $256m (€208.2m) to the fund.
Listed on the Luxembourg stock exchange, the fund aims to increase the capacity of emerging market banks to fund climate-smart investments.
It is understood that an IFC-managed technical assistance program, funded initially by a $7.5m (€6.1m) grant from SECO (Swiss Secretariat for Economic Affairs) will support the creation of new markets for climate finance by developing green bond policies, providing training programs for bankers, and easing the adoption of the Green Bond Principles and international best practices in emerging markets.
Investors in the fund include a number of pension funds (Alecta, AP3, AP4, APK Pensionkasse, APK Vorsorgekasse AG, ERAFP, MP Pension), insurance companies (Crédit Agricole Assurances, LocalTapiola General Mutual Insurance Company, LocalTapiola Mutual Life Insurance Company), asset managers, international development banks, and other institutions (the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and Proparco)
Yves Perrier, Amundi CEO said: “This landmark transaction with IFC contributes to Amundi’s innovative and leading role in the climate finance space. Leveraging on Amundi’s emerging market debt investment capabilities, our commitment to ESG, and IFC’s unique outreach in emerging countries, Amundi Planet is a one-of-a-kind example of the potential that public private partnerships can bring to investors and to the society.”
Philippe Le Houérou, IFC CEO added “The global market for green bonds has expanded rapidly in recent years—totaling more than $155 billion in 2017, but few banks in developing countries have issued such bonds. IFC and Amundi expect this new fund to encourage more local financial institutions to issue green bonds, by increasing global demand and building local markets.”
“The EIB is very proud to become a cornerstone investor in the first emerging market green bond fund with a $100m investment,” said EIB vice-president Ambroise Fayolle.
“This exciting new initiative will transform sustainable investment in countries that are the most vulnerable to climate change, and enable local financial institutions to issue green bonds. Through its investment, the EIB will help accelerate emerging markets towards a green economy, while supporting growth and employment. The EU bank remains committed to mobilising private investors and financing projects to deliver on the Sustainable Development Goals (SDGs) and the Paris COP 21 climate agreement,” he added.