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IFC, Amundi to create $2bn green bond fund for emerging markets

CTBR Staff Writer Published 24 April 2017

A new $2bn fund will be created by the International Finance Corporation (IFC) and Amundi which will be used for investing in clean energy in emerging markets.

The green-bond fund from the World Bank Group member and the European asset manager aims to strengthen regional capital markets and expand funding for climate investments.

IFC and Amundi are looking at the new fund dubbed as Green Cornerstone Bond Fund to bring in more regional financial organizations to issue green bonds by increasing demand globally and building local markets.

IFC CEO Philippe Le Houérou said: “This green-bond fund will lower the risk for the private sector and attract new investors – essentially creating a market where there was none.

“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.”

The partners via an IFC-led donor-funded investment support facility will collaborate with financial organizations to boost their green bond issuing capacity besides training them and sharing globally proven practices with them.

IFC has committed to an investment of $325m in the new green fund which in turn will buy green bonds issued by banks across Asia, Africa, Latin America, the Middle East, Central Asia and Eastern Europe

Amundi will raise the remainder of the $2bn from institutional investors across the world apart from offering its services in handling emerging-market debt.

Amundi chairman Xavier Musca 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.”

As per IFC, the Green Cornerstone Bond Fund aims to be totally invested in green bonds in a period of seven years.