International Finance Corporation, IFC, and Amundi (AMUN:FP), a leading European Asset Manager, have agreed to create the largest green-bond fund dedicated to emerging markets. It is a $2 billion initiative that aims to deepen local capital markets and expand financing for climate investments.
IFC will invest up to $325 million in the new Green Cornerstone Bond Fund, which will buy green bonds issued by banks in Africa, Asia, the Middle East, Latin America, Eastern Europe, and Central Asia.
Amundi will raise the rest of the $2 billion from institutional investors worldwide and will provide its services in managing emerging-market debt. The fund aims to be fully invested in green bonds within seven years.
IFC and Amundi expect the new fund to encourage more local financial institutions to issue green bonds by increasing global demand and building local markets. Together, through a donor-funded investment support facility led by IFC, they will work with local financial institutions to strengthen their capacity to issue green bonds, providing training and sharing international best practices with them.
– 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.
– This innovative partnership with IFC is a major achievement for Amundi. 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, said Xavier Musca, Chairman of Amundi.
The Bank Group (the World Bank and IFC) is a major issuer of green bonds. So far, the World Bank has issued $8.5 billion in green bonds in 18 currencies. IFC has issued $5.8 billion in 12 currencies.