The EIB and Allianz Global Investors (AllianzGI) have closed the Emerging Markets Climate Action Fund recently with a total size of €450 million; with €20 million in a contribution by the German government. The instrument has since transformed to be one of the biggest blended finance equity funds in the space for emerging market climate finance. EIB Investment Bank AllianzGI collaboration has been crucial for this achievement.
Climate finance mobilisation in emerging markets
The EMCAF was launched in 2021 with the intent of mobilising up to €7.5 billion for climate projects in emerging and developing markets. The fund has already shown great growth, where investments have primarily been on renewable energy and energy efficiency. Additionally, it supports sustainable transport, forestry, water supply, and wastewater management. This initiative aligns closely with the goals of the EIB Investment Bank AllianzGI partnership.
EMCAF also plans to back 15 funds and over 150 projects to cut emissions, adapt to climate change, and advance sustainability.
Driving Public and Private Partnerships
EIB Vice-President Ambroise Fayolle highlighted the importance of EMCAF, stating, “EMCAF shows the power of public and private partnerships to bridge the global climate finance gap,”
He added, “As the climate bank, the EIB will continue to prioritise innovative financial instruments to assist developing countries to accelerate a green and climate change resilient transition through the EIB Investment Bank AllianzGI collaboration.”
In 2022, the G7 supported EMCAF as a key initiative to drive private investments in climate infrastructure and enhance multilateral collaboration.
In its second year, EMCAF has made significant contributions to climate projects across Africa, Asia, and Latin America. Last year alone, the fund provided $100 million for four transactions supporting renewable energy, sustainable mobility, and green infrastructure. These included investments in Helios CLEAR Fund, AIIF4 Climate Investment Fund, Southeast Asia Clean Energy Fund II, and Exagon Latin America Fund I.
Stephanie Lindemann-Kohrs, Director of Global Equity and Funds at KfW, remarked on EMCAF’s impact, stating, “EMCAF has proven, that equity investments in climate mitigation and adaptation projects represent a suitable impact investing theme.” Through its innovative structure, EMCAF leverages crucial private capital to create financial instruments that drive impactful climate projects, thanks in part to the EIB Investment Bank AllianzGI partnership.
Also read: EIB and Societe Generale Unveil €8 Billion Wind Energy Investment Initiative
Broad Investor Support
EMCAF has attracted a diverse group of investors, including the EIB, Nordic Development Fund, United Kingdom Foreign, Commonwealth & Development Office, Allianz insurance companies, Folksam insurance companies, and EIB Global, the EIB’s development arm.
Additionally, EMCAF recently released its 2023 impact report, showcasing strong capital mobilisation and key climate impact indicators. The report shows a reduction of approximately 800,000 metric tons of greenhouse gas emissions.