HSBC and IFC Raise $474 Million Through Emerging Markets’ Green Bond Fund

Seven other private investors have also joined HSBC and IFC


The HSBC Global Asset Management and the International Finance Corporation (IFC), the financial arm of the World Bank Group, have announced the third closing of the HSBC Real Economy Green Investment Opportunity GEM Bond Fund (REGIO). $474 million (~₹36 billion) was raised to support climate mitigation investments across the emerging markets.

In June 2019, the International Finance Corporation, along with HSBC Global Asset Management, had announced the first global green bond fund aimed at real economy issuers in developing markets, to help in improving accessibility to climate finance and enhance green bond markets. The Real Economy Green Investment Opportunity GEM Bond Fund was expected to raise between $500 million to $700 million through multiple sources to promote climate centric investments in emerging economies.

According to the company’s statement, “The emerging market countries have been hit by some of the worst impacts of climate change, and many are insufficiently equipped to address them. REGIO is designed to attract investments into these economies, enabling their energy transition and helping them limit the effects of climate change.”

The release states that HSBC and IFC each committed $75 million to the fund as anchor investors. Meanwhile, seven other private investors have also joined HSBC and IFC.

Noel Quinn, Group Chief Executive, HSBC, said: “At HSBC, we have a long history of connecting markets with opportunities, and we recognize that economic growth must be sustainable over the long term. Investors want more socially and environmentally responsible investment opportunities and funds such as REGIO, which are a way for them to achieve their sustainable objectives.”

Philippe Le Houerou, the chief executive officer of IFC, pointed out that the success of this fundraising is proof that investors remain committed to fighting climate change even during the time of the global pandemic.

The fund would provide a solution to global institutional investors to achieve impact and generate sustainable returns at the same time.

Nicolas Moreau, Global CEO, HSBC Global Asset Management, said: “We are at a tipping point in terms of climate change and investing in the real economy in emerging markets is critical to achieving the global transition to a lower-carbon economy. Funds such as REGIO prove how we can achieve real economic impact in the markets that are most challenged by it.”

The company also stated that to bolster the supply of green bonds issued by real sector borrowers, REGIO’s investment activities will also be complemented by a technical assistance facility managed by IFC.

IFC is one of the world’s leading issuer of green bonds and has green bonds in 20 currencies, with a total of more than $10 billion. In March 2020, the IFC announced that it had invested ₹200 million (~₹14.7 billion) in the Standard Bank of South Africa’s green bond place on the London Stock Exchange.