Amundi is to help create an emerging market green bond fund in partnership with IFC, a World Bank Group developmental organisation.
IFC, which selected Amundi as asset manager, will invest up to $325 million (€303 million) in the 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 targeted $2 billion from institutional investors worldwide.
The IFC-backed initiative aims to deepen green capital markets. Few banks in developing countries have issued green bonds and so IFC and Amundi expect the fund to encourage more local financial institutions to become issuers.
The fund aims to be fully invested in green bonds within seven years.
Philippe Le Houérou, CEO of IFC, said: “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 fund will contribute to the World Bank Group climate targets and IFC’s goal of increasing its climate investments to 28% of investments made from its own account, while mobilising an additional $13 billion a year in private financing by 2020.
IFC, which helps emerging market businesses to develop, is itself is a green bond issuer, having issued $5.8 billion in 12 currencies.
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