French asset manager Amundi and the European Investment Bank (EIB) have reached a first close of €253m for their green debt programme, which aims to provide climate financing to meet the Paris Agreement.
Amundi, which has €1.47trn of assets under management, and the EIB said they hoped to enhance the green debt market “beyond existing green bonds”.
The Green Credit Continuum programme supports small-scale green projects and finances green small and medium-sized enterprises. The first of three planned vintages will invest in nascent green segments and is hoped to open up the market.
“The fund may invest across the EU, and will invest where there are eligible green assets that fit the fund’s investment profile.
“The fund will target investments in three segments: private debt, securitisation, and high-yield. All investments will be ‘green’, and aligned with the Green Bond Principles / Green Loan Principles.
“As the EU taxonomy develops, it is expected that the fund will also align with it. The fund is neutral on specific underlying sectors or technologies, which must however comply with environmental, social and governance and ‘green’ criteria,” a spokesperson of the EIB told Expert Investor.
The programme, which Amundi said offers higher yields to investors and fosters the development of new market instruments, was launched in July this year, with an initial commitment of €60m financed by the EIB. It seeks to raise €1bn altogether.
Among the institutional investors who have committed to the programme are: French public sector financial institution Caisse des Dépôts, French public sector reinsurer Caisse Centrale de Réassurance, French social pension group Le Groupe Agrica, Danish pension fund Lærernes Pension and French banking group Crédit Agricole through its regional banks.
Amundi said it was creating a Green Transaction Network with leading financial institutions and issuers to source deals and projects, maximise the impact of the programme and expand the green credit market.
Additionally, a scientific committee of green finance experts has been established to promote environmental guidelines for the target markets, in line with international best practice and legislation from the European Commission’s action plan on sustainable finance.
Olivier Mareuse, CIO at Caisse des Dépôts, said: “It [the initiative] will enhance the development of the green bond market beyond investment grade bonds, toward high-yield and non-listed debts.”
EIB vice-president Ambroise Fayolle commented that the EIB seeks to close climate financing gaps, including in Europe, with the initiative.
The EIB has committed $100bn to climate action between 2016 and 2020.
The IFC, the sister organisation of the World Bank, and Amundi launched the world’s largest green bond fund focused on emerging markets, the Amundi Planet Emerging Green One (EGO), in March 2018.
EGO closed at $1.42bn and aims to increase the capacity of emerging market banks to fund climate-smart investments.