The International Finance Corporation (IFC) and France-based asset manager Amundi SA (EPA:AMUN) today said they have agreed to create a USD-2-billion (EUR 1.9bn) green bond fund that will invest in emerging markets.
The new Green Cornerstone Bond Fund will buy green bonds issued by banks in Africa, Asia, the Middle East, Latin America, Eastern Europe and Central Asia. IFC, a member of the World Bank Group, will invest up to USD 325 million in the vehicle, while Amundi will raise the balance of the USD 2 billion from institutional investors around the world. The fund should be fully invested in green bonds within seven years.
The pair said that while the global green bond market has grown fast in recent years, reaching over USD 100 billion in 2016, few banks in developing countries have issued such bonds.
"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 chief executive Philippe Le Houerou. He added that dozens of banks in many developing countries have already been identified that could be interested in the fund. IFC and Amundi will work to help local financial institutions issue green bonds, providing training and sharing international best practices with them.
The fund is the first initiative as part of a joint venture between IFC and Amundi focused on developing green finance in emerging markets. Amundi was picked through a competitive process for the partnership, according to the announcement.
(USD 1.0 = EUR 0.931)
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