Stockholm (NordSIP) – The French Asset Manager Amundi together with IFC, a member of the World Bank Group, have launched the largest green-bond fund yet. The USD 2 billion fund will be dedicated to emerging market, with the goal to improve access to financing for the local capital markets, especially for climate-related projects.
Despite a fast growing global market for green bonds, access to such financing remains difficult in emerging economies. IFC and Amundi want to encourage local financial institutions to issue green bonds. To do so, they will be relying on a donor-funded investment support facility led by IFC to strengthen the local institution’s capacity; they will provide training and share international best practices.
The new USD 2 billion Green Cornersone Bond Fund will be raised by Amundi from institutional investors. IFC will be investing up to $325 million of the total, and will provide first-loss coverage to lower the risk for other investors. The fund is expected to deploy its capital over 7 years, and invest in green bonds issued by banks in Africa, Asia, the Middle East, Latin America, Eastern Europe, and Central Asia.
“This green-bond fund will lower the risk for the private sector and attract new investors – essentially creating a market where there was none,” said IFC CEO Philippe Le Houérou. “We’ve already identified dozens of banks in many developing countries around the world that could be interested in this fund. It’s a win-win—supporting the green economy and deepening access to international markets for emerging market issuers.”
Xavier Musca, Chairman of Amundi said: “This innovative partnership with IFC is a major achievement for Amundi, the leading European Asset Manager. This project highlights the strong capabilities in green financial innovation of Credit Agricole Group. I consider this project as a game changer: it is both an investment opportunity for institutional investors and it will have an impact on society by accelerating the shift of emerging markets toward a green economy.
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