World Bank subsidiary makes US$325 million green investment commitment
(27 April 2017 – Global) The International Finance Corporation (IFC), the private-sector arm of the World Bank, has committed to invest US$325 million (A$435 million) in a new green bond fund designed to help finance environmentally friendly projects in developing markets.
The IFC has partnered with Amundi, Europe’s largest listed asset manager, with the aim of raising up to US$2 billion from other international investors to create the biggest green bond fund dedicated to emerging markets to date.
The fund, which plans to be fully invested within seven years, is pitched at institutional investors including sovereign wealth funds, pension schemes and insurance companies.
Although green bond issuance has accelerated following the signing of the Paris climate agreement in December 2015, few banks in emerging markets have issued green bonds so far, creating a gap in the market the IFC and Amundi want to plug.
“This fund will essentially create a green bond market where there was none,” said Philippe Le Houérou, chief executive of the IFC.
He added that the IFC would create a dedicated team to provide training and technical support to financial institutions in emerging markets and that dozens of banks in developing countries had already been identified as potential partners.
Xavier Musca, Amundi’s chairman, said the partnership with the IFC would prove a “game changer in accelerating the shift across emerging markets toward a green economy”.
Amundi, which will manage the new fund, has attempted to portray itself as a frontrunner in financing initiatives to fight climate change. In 2014, it partnered with EDF, the Paris-based energy group, to create a joint asset management company to raise €1.5 billion to invest in renewable energy projects and energy-saving strategies.
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