Three development banks have made a combined investment of US$425 million to a fund that will invest in green bond issuances by financial groups in emerging sectors.
The European Bank for Reconstruction and Development (EBRD) has invested US$68.5 million in the “Amundi Planet – Emerging Green One” Fund, which stands as the world’s largest green bond fund with a total investor commitment of US$1.42 billion.
The International Finance Corporation (IFC) and the European Investment Bank (EIB) have committed US$256 million and US$100 million to the fund, respectively.
The fund was set up by Amundi, Europe’s largest asset manager, in partnership with the IFC. It is the first fund which focuses on investing in green bonds issued by private sector financial institutions.
Along with the investment, the EBRD is also launching a Green Bond Technical Cooperation Programme within the bank’s region that will help spur the issuance of green bonds to these projects. The fund will allocate at least three times the amount of the EBRD’s investment to the EBRD’s countries of operations.
According to the Climate Bonds Initiative, the global market for green bonds has skyrocketed in recent years — exceeding US$155 billion of issuance in 2017.
With this fund, the EBRD and other banks will collaborate to set down best practises for emerging market green bond issuances that go with the Green Bond Principle — voluntary process guidelines developed by a broad assortment of market groups under the secretariat of the International Capital Market Association.