Three multilateral development banks plan to invest in an emerging market green bond to support the development of this sector, the European Bank for Reconstruction and Development (EBRD) announced on Friday.
EBRD, the International Finance Corporation (IFC) and the European Investment Bank (EIB) will invest in the plan.
"The EBRD has invested $68.5 million in the 'Amundi Planet – Emerging Green One' Fund, which with a total investor commitment of $1.42 billion, is the world’s largest green bond fund and the first exclusively dedicated to emerging markets," according to the announcement.
The 'Amundi Planet – Emerging Green One' fund was set up by Amundi, the leading European asset manager, in partnership with the IFC, a member of the World Bank Group.
According to EBRD's website, it is the first fund focusing on investments in green bonds issued by private sector financial institutions.
In addition, the bank stated that through investing in green bonds, the fund would facilitate capital-raising and investment in projects with environmental benefits while using capital market mechanisms to help channel capital flows to green projects that advance the transition towards a low-carbon economy.
The IFC and the EIB have committed $256 million and $100 million to the fund, respectively.
The fund is expected to allocate at least three times the amount of the EBRD’s investment to countries in which the bank operates.
According to the announcement, the EBRD issued its first green bonds in 2010, supported by its green project portfolio, which includes more than 300 projects in excess of €3.5 billion.
"Since 2010, the EBRD has issued 67 green bonds totaling €2.4 billion equivalent," the bank stated.
By Gulsen Cagatay