New bond facility backed by International Finance Corporation.
HSBC Asset Management has raised $538m for its new Real Economy Green Investment Opportunity (REGIO) fund, concluding its programme to secure initial investors.
REGIO has been created with both public and private capital to build climate change-mitigation capacity in developing countries. It will do this by investing in green bonds for projects, according to clear eligibility criteria focused on the Paris climate agreement.
It is hoped this will support a wider shift in developed world finance towards sustainable growth in emerging nations by expanding finance for projects deemed to generate real outcomes in the green economy.
Nicolas Moreau, chief executive of HSBC Asset Management, said: “Climate change is one of the main risks of our lifetime and for REGIO to close at this size during a global pandemic highlights how important combatting it is to investors, and we are thankful to them for their support.”
The fund was first announced in 2019 with an initial commitment of $75m from both HSBC and the International Finance Corporation. Its investment-raising programme closed this week having raised an additional $388m from a total of investors.
One of the additional investors was PROPARCO, a subsidiary of Agence Française de Développement. Its chief executive Grégory Clemente is hoping the fund will influence others.
Clemente said: “This innovative project will contribute to rechannelling financial flows from OECD countries towards green projects in emerging markets. The mobilisation of institutions like PROPARCO also attracts investors that are less familiar with the risks in these markets associated with these geographical areas.”
The fund’s investments will be governed by HSBC’s Green Impact Investment Guidelines which set out a framework of eligibility for projects and activities. The framework aims to show potential bond issuers the eligibility criteria the firm will apply when selecting green bonds for REGIO, which in turn should help drive up the veracity of green outcomes.
The full list of investors is:
Cardif Assurance Vie
Cassa Depositi e Prestiti S.p.A
Gothaer Asset Management
HSBC Asset Management
International Finance Corporation
Verka VK Kirchliche Vorsorge,
Versorgungswerk der Apothekerkammer Westfalen-Lippe.