Washington, D.C., April 21, 2017—IFC,
a member of the World Bank Group, and Amundi, a leading European Asset
Manager, today agreed to create the largest green-bond fund dedicated to
emerging markets—a $2 billion initiative that aims to deepen local capital
markets and expand financing for climate investments.
The global market for green bonds has expanded rapidly in recent years—totaling
more than $100 billion in 2016. But a huge gap persists: few banks in developing
countries have issued such bonds. 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.
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.
Amundi was selected through a comprehensive and competitive process. The
fund is the first product of a joint venture between IFC and Amundi aimed
at developing green finance in emerging markets.
“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.”
Initially, the fund will focus on countries and banks that have a high
potential to issue green bonds— before spreading into other markets. IFC
will also provide first-loss coverage, helping to lower the risk and mobilizing
financing from the private sector. This will help ensure that the fund
can operate in more challenging markets, including the poorest countries
and conflict-affected areas.
The fund will contribute significantly to the World Bank Group climate
targets and IFC’s goal of increasing its climate investments to 28 percent
of investments made from its own account while mobilizing an additional
$13 billion a year in private financing by 2020.
The Bank Group 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.
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector in emerging markets. Working
with 2,000 businesses worldwide, we use our six decades of experience to
create opportunity where it’s needed most. In FY16, our long-term investments
in developing countries rose to nearly $19 billion, leveraging our capital,
expertise and influence to help the private sector end extreme poverty
and boost shared prosperity. For more information, visit www.ifc.org
Publicly traded since November 2015, Amundi is the largest European Asset
Manager in terms of AUM(*), with over 1,000 billion euros worldwide. Headquartered
in Paris, France, Amundi has seven investment hubs located in the world’s
key financial centers, and offers a combination of research depth and market
experience that has earned the confidence of its clients.
Amundi is the trusted partner of 100 million retail clients, 1,000 institutional
clients and 1,000 distributors in more than 30 countries, and designs innovative,
high-performing products and services for these types of clients tailored
specifically to their needs and risk profile. Go to amundi.com
for more information or to find an Amundi office near you.
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Amundi figures as of 31 December 2016. (*) No.1 European asset manager
based on global assets under management (AUM) and the main headquarters
being based in Continental Europe - Source IPE “Top 400 asset managers”
published in June 2016 and based on AUM as at December 2015.