The International Finance Corporation (IFC) announced on Wednesday that it would partner two institutional investors – Allianz Global Investors, and Hong Kong Monetary Authority (HKMA) – to create a new US$3.0 billion global platform for climate-smart investment in line with the Paris Agreement, according to a press statement.

The new programme – MCPP One Planet – would combine institutional investors’ contributions along with the IFC’s own funds to scale up climate-responsible financing for private companies in emerging markets.

MCPP One Planet would create the world’s first cross-sectoral portfolio of emerging-market loans – aligned with the Paris Agreement.

The facility would enable institutional investors to directly provide capital for sustainable lending in emerging markets – allowing investors to scale up their exposure to this asset class and increase the share of their portfolios, aimed at climate-resilient development.

MCPP One Planet builds on successful collaboration between the IFC and its partners and would mark a further scale-up of the IFC’s innovative private debt platform – Managed Co-Lending Portfolio Programme (MCPP).

Since its launch in 2013, MCPP has raised over $10 billion from 11 investors and provided financing to more than 200 firms across 55 developing countries.

Announcing MCPP One Planet at COP26 on Wednesday, IFC Managing Director Makhtar Diop said expanding partnerships with some of the world’s largest investors is fundamental to scaling up financial flows to emerging markets for climate-smart solutions, consistent with the goals of the Paris Agreement.

“MCPP One Planet will create a global model for mobilisation of institutional investor financing in support of the climate agenda for the most vulnerable communities on the frontlines of climate change – in emerging and developing economies,” he added.

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“Our strong partnership with the IFC and engaged investors enables us to shape programmes like MCPP One Planet, and contribute to climate-smart economic growth in markets of scale,” said Oliver Bäte, Chief Executive Officer of the Allianz SE.

Huge sums need to be invested to bring emerging markets along with a Paris-aligned trajectory, and we are keen to help structure these public-private collaborations and mobilise the required capital, he noted.

“Today, we are proud to extend our successful partnership to MCPP One Planet. It is a great example for effectively scaling private capital for sustainable investing as part of our development finance business,” said Deborah Zurkow, Global Head of Investments of the Allianz Global Investors.

The HKMA has partnered with the IFC in the MCPP initiative, targeting sustainable investments across emerging markets since 2017.

“We are very pleased to further our partnership with the IFC to develop MCPP One Planet, which aligns with the HKMA’s commitment to green and sustainable investments,” said Eddie Yue, Chief Executive of the HKMA.

Joining hands with the IFC allows the HKMA to tap into the considerable expertise, experience and network of the IFC in sourcing investable and climate-responsible opportunities with proper risk management and governance framework.

“Together with the IFC and other like-minded partners, we believe that MCPP One Planet initiative will support emerging markets in accelerating their transition to low-carbon economies and provide the catalytic and demonstrative effect in the scaling of climate-responsible investments,” he added.

Meanwhile, in another statement, the IFC said it partnered with Amundi, Europe’s largest asset manager, to establish a new fund to mobilise up to $2.0 billion in private investment into emerging market sustainable bonds that support COVID-19 relief efforts and promote a green, resilient and

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Unveiled on the sidelines of the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow, Scotland, the Build-Back-Better Emerging Markets Sustainable Transaction (BEST) strategy would be managed by Amundi.

The $2.0 billion strategy would channel capital from institutional investors into anchor investments in sustainable bond issuances from corporates and financials in developing countries.

This, in turn, would enable even more funding for such transactions, further strengthening the asset class and deploying greater resources in priority areas, such as climate and gender, it added.

[FE Report]

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