First LatAm green bond fund launched at COP26
Fund to help Latin America meet national targets set out in the Paris Agreement
The first green bond fund for the Latin America region was launched on Wednesday at the COP26 conference, with $500m of investment expected in five years.
The fund, LAGreen, was initiated by KfW and will be managed by Finance in Motion, an alternative investment management firm focused on development finance based in Germany.
LAGreen will invest in green bonds issued in Latin America to fund climate friendly projects in the region. It aims to help countries in Latin America meet national targets set out in the Paris Agreement to reduce emissions and adjust to climate change.
"Development of the Latin American bond markets removes barriers to economic growth while addressing environmental and climate challenges,” said Christiane Laibach, member of the KfW group executive board, in a statement. “With the LAGreen fund, KfW is contributing its expertise as one of the largest issuers of green bonds worldwide and therefore also helping to mobilise private capital. This is indispensable for implementing international climate targets,"
Also at COP26, the European Investment Bank and Allianz Global Investors 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 will support climate-focused investment funds and projects in emerging markets and developing countries with a focus on climate mitigation, climate adaption and access to electricity.
It will have a target size of €500m with an investment criteria based on the EU taxonomy for sustainable activities. Examples of projects it could support are onshore windfarms, solar photovoltaic plants or small and medium sized hydropower plants.