IPPToday #179: IFC and Amundi close US$1.4 billion green bond fund
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IFC, a member of the World Bank Group, and Amundi, Europe’s largest asset manager, have announced the successful launch of the world’s largest targeted green bond fund focused on emerging markets, the Amundi Planet Emerging Green One (EGO).
The fund, which closed at US$1.42 billion, is expected to deploy US$2 billion into green bonds in emerging markets over its lifetime, as proceeds are reinvested over 7 years. It will actively invest in green bonds issued by financial institutions in emerging markets through to 2025.
The formation of the Amundi Planet EGO marks the end of a successful fundraising campaign, bringing together a large diversified network of institutional investors across Europe and the Middle East. The fund is listed on the Luxembourg Stock Exchange.
The fund aims to increase the capacity of emerging market banks to fund climate-smart investments. The long timescale and large size of the fund is expected to significantly increase the scale and pace of climate finance in emerging markets by crowding in capital from investors and creating new markets.
The fund’s positive reception demonstrates the increasing appetite for climate investment.
The capital raised includes US$256 million cornerstone commitment from the IFC. This illustrates the corporation's commitment to increasing its climate investments to 28% from its own account, and mobilizing an additional US$13 billion a year in private financing by 2020.
Philippe Le Houérou, IFC CEO, commented:
"The global market for green bonds has expanded rapidly in recent years—totaling more than US$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."
Yves Perrier, Director General of Amundi, 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."