IFC and HSBC Establish Green Bond Fund Focused on Providing Access to Climate Finance

The IFC and HSBC will invest $100 million and $75 million respectively


The International Finance Corporation (IFC), the financial arm of the World Bank, along with HSBC Global Asset Management, has announced their first global green bond fund aimed at “real economy” issuers in developing markets, which in turn would help in improving accessibility to climate finance and enhancing green bond markets.

The Real Economy Green Investment Opportunity (REGIO) Fund is expected to raise $500 million to $700 million through multiple sources to promote climate centric investments in emerging economies. The focus is on green bonds issued by real sector companies, and the fund is expected to help non-financial borrowers gain access to climate finance.

“This innovative fund will provide new opportunities for an important class of borrowers in green bond markets,” IFC CEO, Philippe Le Houérou said in a media statement. “The capital raised by REGIO will make a vital contribution to the fight against climate change and further promote sustainability-oriented capital markets,”  he added.

The IFC and HSBC will invest $100 million and $75 million respectively as anchor investments to promote the fund. The focus is to promote the evolution to a low-carbon economy.

REGIO aims to assist institutional investors to meet their financial needs while providing access to feasible and adaptable climate finance through green bonds.

Through this creative fund generation venture, HSBC and IFC are building accessibility to capital that will enable much-needed progress in the field of sustainability. This move is in tandem with the World Bank’s various endeavors to combat climate change.

IFC has been the frontrunner in the green bond market and has issued products over $9 billion since 2010.

Adani Green Energy Limited (AGEL), the renewable energy arm of Adani Group also recently announced it would raise $500 million through green bonds.

Earlier, the IFC had declared that it would invest $75 million in listed green bonds issued by AC Energy, the power arm of Philippines based Ayala Corporation. Based on information from AC Energy and IFC, these are the first certified green bonds targeting infrastructure. These bonds are listed on the Singapore Exchange.

Early this year, Tata Cleantech Capital Limited (TCCL) raised ₹1,800 million (~$25.62 million) through green bonds from FMO, the Netherlands Development Finance Company.

In December 2018, the ADB had also announced that it would invest 5 billion Thai baht ($155 million) in one of Thailand’s largest private power producers, B.Grimm Power through 5-year and 7-year green bonds.



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