Investor commitments approaching $540m have been tallied for a new green bond set up by international bank HSBC and the International Finance Corporation (IFC) that is aiming at boosting access to climate finance in developing economies.
The closing of the HSBC Real Economy Green Investment Opportunity GEM Bond Fund (Regio), which is backed by ten private investors including French private finance body Proparco and Italian investment bank Cassa Depositi e Prestiti y, is said to be the first fund focused on “well-diversified climate-smart investments in climate change-mitigation capacity from ‘real economy’ issuers in emerging market countries”.
HSBC launched the green bond with the IFC, an arm of the World Bank, in 2019 to help markets “most at threat from the effects of climate change” in their transition to a low-carbon economies by promoting the development of sustainable capital markets through a “broader range of issuers”.
“Investing in green bonds is not just about fighting climate change – it's about paving the way for lasting, positive change,” said IFC senior vice president of operations Stephanie von Friedeburg.
“The final closing of Regio reflects IFC's commitment to innovation, partnerships, and impact investing across emerging markets and demonstrates the continued relevance of capital markets in the transition to low-carbon economies.”
Nicolas Moreau, CEO of HSBC Asset Management, stated: “The emphasis that we need to place on helping economies transition sustainably is more significant than ever before. Climate change is one of the main risks of our lifetime and for Regio to close at this size during a global pandemic highlights how important combatting it is to investors.”
Proparco CEO Grégory Clemente said: “This investment mobilises private finance to fight against climate change and accelerate the energy transition [and] will contribute to rechannelling financial flows from OECD [Organisation for Economic Co-operation and Development] countries towards green projects in emerging markets.”
Other investors in Regio include insurers Aviva and Cardiff Assurance Vie, asset management firm Gothaer, and European pension funds Lærernes, Verka VK Kirchliche Vorsorge, Diaconia and Versorgungswerk der Apothekerkammer Westfalen-Lippe.