WASHINGTON, June 4, 2019—IFC, a member
of the World Bank Group, and HSBC Global Asset Management today announced
the creation of the first global green bond fund targeting “real economy”
issuers in emerging markets, increasing access to climate finance and promoting
the further development of green bond markets.
The Real Economy Green Investment Opportunity (REGIO) Fund is expected
to catalyse at least $500 million to $700 million in multilateral and private
sector capital to support well-diversified climate-smart investments in
developing countries around the world—largely through green bonds issued
by non-financial, or real sector, companies.
“This innovative fund will provide new opportunities for an important
class of borrowers in green bond markets,” said IFC CEO Philippe Le Houérou.
“The capital raised by REGIO will make a vital contribution to the fight
against climate change and further promote sustainability-oriented capital
Non-financial borrowers represent an untapped opportunity in the global
green bond market. REGIO will increase access to climate finance for these
borrowers by targeting a mix of manufacturing, agribusiness, services,
infrastructure, and sub-sovereign bonds, in addition to a smaller allocation
of financial-sector bonds.
IFC will provide a $100 million anchor investment in the fund. HSBC will
invest up to $75 million. The fund will have a total life of up to 15 years,
including a seven-year investment period.
“HSBC Global Asset Management has deep expertise and experience in investing
in global emerging markets and a strong commitment to playing its part
in mobilising capital to deliver on the UN Sustainable Development Goals
and transition to a low-carbon global economy,” said Sridhar Chandrasekharan,
Global CEO, HSBC Global Asset Management.
REGIO draws on IFC’s leadership in the green bond market—as an issuer,
investor, and standard setter. Since 2010, IFC has issued 143 green bonds
in 16 currencies, totalling over $9 billion.
REGIO aims to attract private capital by helping institutional investors
attain their goals of allocating resources to developing economies, while
achieving long-term sustainable growth and meeting fiduciary obligations.
In particular, the fund will help address the demand for climate finance
by providing an innovative, sectorally diversified vehicle to investors
who currently lack the capability to invest in individual green bond transactions.
A proprietary green impact framework and clear sustainability governance
policies will ensure that REGIO adheres to measurable green impact objectives,
both for targeted issuers and transparent impact reporting.
To bolster the supply of green bonds issued by real sector borrowers, REGIO’s
investment activities will also be complemented by a Technical Assistance
Facility, or TAF, managed by IFC.
By partnering in this innovative, diversified fund solution, HSBC and IFC
are sending a clear message to the market on the importance of mobilising
capital needed to make meaningful progress towards achieving the Sustainable
Development Goals. This effort complements the World Bank Group’s commitment
to investing and mobilizing $200 billion over five years to combat climate
change and increasing climate finance to at least 35 percent of its direct
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In fiscal year 2018, we delivered more
than $23 billion in long-term financing for developing countries, leveraging
the power of the private sector to end extreme poverty and boost shared
prosperity. For more information, visit www.ifc.org.