The European Investment Bank (EIB) and Allianz Global Investors (AllianzGI), one of the world’s leading active investment managers, today launched the Emerging Market Climate Action Fund (EMCAF) in a public and private partnership, with the Governments of Germany and Luxembourg, the Nordic Development Fund, Allianz, Folksam and EIB being anchor investors.
EMCAF is a fund of funds that supports climate-focused investment funds and projects active in emerging markets and developing countries. Its focus will be on climate mitigation, climate adaptation, and access to electricity.
With a target size of €500 million, EMCAF aspires to become a European flagship impact investing initiative, mobilising substantial amounts of private capital to get climate action projects off the ground in Africa, Asia, Latin America and the Middle East. EMCAF investments are expected to support a significant amount of new clean energy capacity globally.
EMCAF invests into specialized investment funds, that could support projects like onshore windfarms and solar photovoltaic plants or small and medium sized hydropower plants. It could also support energy efficiency projects in housing or industry, or projects bringing environmental or resource efficiency benefits. To help emerging and developing countries to adapt to the impacts of climate change, the fund could also finance projects that support cities and their public transport systems to become more resilient against floods or heat.
“As world leaders meet in Glasgow, this is a pivotal time for the planet. That’s why I am delighted to see the joint efforts spearheaded by the European Investment Bank and Allianz Group to enhance support for developing countries and help mobilise green finance to meet the Paris Agreement goals.”Alok Sharma, President of COP26 in Glasgow
“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.”EIB Vice-President Ambroise Fayolle
“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.”Tobias Pross, CEO of AllianzGI
As EMCAF’s investment advisor, the EIB is responsible for market analysis, the identification and appraisal of investments, including their environmental and social aspects. AllianzGI will act as the Alternative Investment Fund Manager (AIFM) responsible for the fund’s management and decision-making. EMCAF complies with the new EU taxonomy, and is accredited as an Official Development Assistance vehicle with the OECD. Its investors will receive transparent impact reporting, including key performance indicators such as renewable electricity produced and CO2 emissions avoided.
EMCAF is a layered instrument combining public and private investors. Alongside EIB, Allianz and Folksam, further partners have already committed to investing in the fund: KfW on behalf of the German Federal Ministry of the Environment, Nature Conservation and Nuclear Safety (BMU), the EIB on behalf of the Government of Luxembourg, and the Nordic Development Fund (NDF). The EIB has committed €50 million, Allianz Group companies up to €200 million and Folksam Group another €150 million. BMU has committed €25 million, the NDF and the Government of Luxembourg each €15 million. The EIB manages the investment in the junior tranche funded by the Government of Luxembourg through the Luxembourg-EIB Climate Finance Platform (LCFP).