Germany’s Kreditanstalt für Wiederaufbau (KfW) has increased its investment in European Investment Bank (EIB) and Allianz Global Investors’ (AllianzGI) emerging markets climate fund, which has closed with €450m in capital commitments.
KfW has added €20m to the Emerging Markets Climate Action Fund (EMCAF), a fund of funds that aims to mobilise up to €7.5bn for climate finance in developing economies.
EMCAF was launched in 2021 and is also backed by Swedish pensions and insurance group Folksam.
KfW is investing on behalf of the German Federal Ministry of the Environment, Nature Conservation and Nuclear Safety and Consumer Protection, Federal Ministry for Economic Affairs and Climate Action and Federal Foreign Office.
Other investors include the Government of Luxembourg, the Nordic Development Fund and the UK Foreign, Commonwealth & Development Office.
The fund mainly invests in renewable energy and energy efficiency, with additional support for sustainable transport, forestry, water supply and wastewater projects. EMCAF will invest in approximately 15 funds, which are expected to support around 150 projects focused on reducing greenhouse gas emissions, adapting to climate change and promoting environmental sustainability, it said.
Ambroise Fayolle, EIB’s vice president, said: “EMCAF shows the power of public and private partnerships to bridge the global climate finance gap. As the climate bank, the EIB will continue to prioritise innovative financial instruments to assist developing countries to accelerate a green and climate change resilient transition.”
Tobias Pross, CEO of AllianzGI, said: “As we close this fund dedicated to climate mitigation and adaptation in emerging markets, we are investing not just in sustainable solutions but in the future of our planet.
“This milestone represents a powerful opportunity to drive meaningful change in the regions where the need is greatest and is testament to the trust of our partners, the dedication of our team and our shared vision for the future.”
Stephanie Lindemann-Kohrs, director of global equity and funds at KfW, said: “EMCAF has proven, that equity investments in climate mitigation and adaptation projects represent a suitable impact investing theme.
“Through our participation in the final close of the fund we were again able to leverage crucial private capital to provide this necessary financial instrument to the targeted regions, enabling private sector players to offer a meaningful contribution to global climate projects with high impact on the ground.”
Satu Santala, MD of the Nordic Development Fund, said: “NDF was proud to be among the first investors in EMCAF, joining forces with other like-minded financiers to support this transformative fund of funds.
“Through its innovative structure, EMCAF has achieved remarkable scale, driving investment into projects that contribute to both climate change mitigation and resilience while profoundly improving lives in the world’s most vulnerable regions.”
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