Active asset manager Allianz Global Investors (AllianzGI) and the European Investment Bank (EIB) announced today the launch of the Emerging Market Climate Action strategy (EMCA), aiming to invest in climate-focused investment funds and projects active in emerging markets and developing countries.
With a target size of €500 million, the fund will focus on climate mitigation, climate adaptation, and access to electricity. EMCA will invest in climate-focused investment funds, supporting projects such as onshore wind farms, solar photovoltaic plants and hydropower plants, as well as energy efficiency projects in housing or industry. The fund could also finance projects that help emerging and developing countries to mitigate the impact and build resiliency to climate change-related events, such as floods or heat.
EIB Vice-President Ambroise Fayolle said:
“Supporting climate projects in emerging and developing countries is the key to meeting the Paris climate goals and to boosting economic activity on the ground. As the EU climate bank, we have a long experience with innovative financial instruments that mobilise private capital at scale. I am delighted that we are announcing this new milestone with Allianz Group today. This sends an important signal to the COP26 conference about the power of public-private partnerships to bridge the climate finance gap.”
The fund is being launched as a public-private partnership, with anchor investors including the Governments of Germany and Luxembourg, the Nordic Development Fund, Allianz, Folksam and EIB.
According to AllianzGI and EIB, EMCA aspires to become a European flagship impact investing initiative, supporting new clean energy capacity globally, and mobilizing substantial amounts of private capital to get climate action projects off the ground in Africa, Asia, Latin America and the Middle East.
Tobias Pross, CEO of AllianzGI said:
“The COVID-19 pandemic has revealed some profound inequalities. In developing countries, the pandemic is thought to have magnified the existing funding shortfall needed to meet the UN’s Sustainable Development Goals by 2030. Many investors have become increasingly aware of the role their capital can and should play in addressing these imbalances. Impact investing can help to combine the twin goals of “doing good” and “earning a return” in a single investment.”