IFC, a World Bank Group member, and Amundi, a European asset management, have launched a new fund to raise up to $2 billion in private investment into emerging market sustainable bonds to support Covid-19 relief operations and promote a green, resilient, and inclusive recovery from the epidemic.
Amundi will manage the Build-Back-Better Emerging Markets Sustainable Transaction ("BEST") initiative, which has been announced on the sidelines of the 26th United Nations Conference of the Parties (COP26) in Glasgow, Scotland, said a press release.
The new IFC - Amundi initiative is designed to help expand the availability of and demand for other segments of the sustainable bond market, which still has room to grow compared to green bonds.
According to the press release, Covid-19 has inflicted a high cost on emerging markets and developing economies, increasing poverty, slowing economic growth, and limiting governments' ability to provide fiscal support.
Growth in private sector issuance of sustainable bonds, alongside increased green bond investment activity, can help to address financing gaps in emerging markets.
IFC Managing Director Makhtar Diop said, "The COVID-19 pandemic and climate change are serious threats to developing countries. Immediate action is required to protect millions more people from falling into poverty, to protect jobs, and to secure a greener future. "
"Innovative capital markets initiatives can play a vital role in the world's response to these emergencies by spurring private investment, igniting a fresh interest in sustainable assets, and supporting economic revival," added Makhtar Diop.
Amundi Chief Executive Valérie Baudson said, "This new initiative will help to create a market for sustainable bond funds in emerging markets. It also demonstrates Amundi's leading role in responsible finance and is a great example of the benefits of public private partnerships for investors and the whole economy."