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Cop28: EIB and AllianzGI’s climate fund boosted by UK, German commitments

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The European Investment Bank and Allianz Global Investors announced an increase in capital commitments to the emerging market climate action fund at the UN’s Cop28 climate change conference in Dubai on 2 December. The fund, launched during Cop26, primarily supports green transition projects in emerging and developing markets around the world.

New contributions to the fund include €10m from the UK foreign, commonwealth and development office and an additional €33m from the German ministry for economic affairs and climate action, through Kreditanstalt für Wiederaufbau. These contributions will enable the fund to reach a total of €385m for its third close in the upcoming weeks, according to a press release.

Since its establishment, the emerging market climate action fund has successfully gathered over $100m through investments in five distinct funds. It operates as a joint venture between the EIB and AllianzGI, focusing on early-stage equity financing for projects and companies engaged in climate mitigation, adaptation and sustainable green business practices in developing economies. The EMCAF is expected to invest in about 12 funds, thereby supporting approximately 150 projects that aim to mitigate climate change and promote environmental sustainability.

In the announcement, EIB vice president Ambroise Fayolle responded to the Cop28 presidency’s call for practical solutions to the climate crisis. He highlighted the EMCAF as a model for mobilising private finance on a large scale. Fayolle expressed satisfaction with the progress made over the past two years and welcomed the new investments from Germany and the UK. The EIB has set a goal to dedicate over 50% of its annual lending to climate action and environmental sustainability by 2025.

AllianzGI CEO Tobias Pross emphasised the urgent need for trillions of dollars annually to tackle climate change in emerging markets. He stressed the importance of innovative financing methods to raise substantial funds. Pross noted AllianzGI’s role in creating investment vehicles to address this financial gap, citing EMCAF as an example. AllianzGI manages global assets worth €516bn as of September 2023.

Notable EMCAF projects include the Arch Cold Chain Solutions Fund in East Africa, Alcazar Energy Partners II in the Middle East, North Africa, Eastern Europe and Central Asia, Vinci Climate Change in Brazil, GEF South Asia Growth Fund III primarily in India, and the Inspired Evolution III Fund in Africa.

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