IFC, institutional investors embark on new multi-billion climate finance initiative

International Finance Corporation (IFC) announced on Wednesday that it will partner with two institutional investors, Allianz through Allianz Global Investors, and the Hong Kong Monetary Authority, to create a new $3 billion global platform for climate-smart investment aligned with the Paris Agreement.

The new program, MCPP One Planet, combines institutional investor contributions with IFC's own funds to scale up climate-responsible financing for private companies in emerging markets, reads a press release.

MCPP One Planet will create the world's first cross-sectoral portfolio of emerging-market loans aligned with the Paris Agreement. 

The facility enables institutional investors to directly provide capital for sustainable lending in emerging markets — allowing investors to scale up their exposure to this asset class and increase the share of their portfolios aimed at climate-resilient development.

MCPP One Planet builds on successful collaboration between IFC and its partners and will mark a further scale-up of IFC's innovative Managed Co-Lending Portfolio Program (MCPP) private debt platform. 

Since its launch in 2013, MCPP has raised over $10 billion from 11 investors and provided financing to more than 200 firms across 55 developing countries.

Announcing MCPP One Planet at COP26, IFC Managing Director Makhtar Diop said: "Expanding partnerships with some of the world's largest investors is fundamental to scaling up financial flows to emerging markets for climate-smart solutions consistent with the goals of the Paris Agreement.”

“MCPP One Planet will create a global model for mobilization of institutional investor financing in support of the climate agenda for the most vulnerable communities on the frontlines of climate change – in emerging and developing economies," he added.

Chief Executive Officer of Allianz SE Oliver Bäte said: "Our strong partnership with IFC and engaged investors enable us to shape programs like MCPP One Planet and contribute to climate-smart economic growth in markets of scale. Huge sums need to be invested to bring emerging markets along with a Paris-aligned trajectory, and we are keen to help structure these public-private collaborations and mobilize the required capital."

Global Head of Investments of Allianz Global Investors Deborah Zurkow said: "In 2016, together with Allianz and IFC, we set up a blueprint to mobilize private capital via the MCPP on infrastructure. Today, we are proud to extend our successful partnership to the MCPP One Planet. It is a great example for effectively scaling private capital for sustainable investing as part of our Development Finance business."

"The HKMA has partnered with IFC in the MCPP initiative targeting sustainable investments across emerging markets since 2017. We are very pleased to further our partnership with IFC to develop MCPP One Planet which aligns with the HKMA's commitment to green and sustainable investments,” Chief Executive of the HKMA Eddie Yue said. 

“Climate risk is one of the biggest threats to our planet and future generations. Joining hands with IFC allows the HKMA to tap into the considerable expertise, experience and network of IFC in sourcing investable and climate-responsible opportunities with proper risk management and governance framework,” he added.

“Together with IFC and other like-minded partners, we believe the MCPP One Planet initiative will support emerging markets in accelerating their transition to low-carbon economies and provide the catalytic and demonstrative effect in the scaling of climate-responsible investments," Yue further said. 

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