Green finance for SMEs to offer “higher yields” for institutions

Amundi is jointly backing a programme to help smaller and medium-sized businesses access green finance and says the debt investments involved will lead to higher yields for investors.

The Paris-based asset manager is partnering with the European Investment Bank (EIB), which issued the world’s first green bond in 2007.

Amundi says the partnership will enable smaller companies to access green finance in contrast to the growing green bond market, which has mainly developed by way of issuances from sovereign, quasi-sovereign and large corporate issuers.  

The Green Credit Continuum investment programme, as it is called, has three components:

  • The creation of a diversified fund that will invest in green high yield corporate bonds, green private debt and green securitised debt.
  • In parallel, a scientific committee of green finance experts will be formed to define and promote environmental guidelines for these three markets in line with international best practice and legislation derived from the European Commission action plan on financing sustainable growth.
  • A green deal network will be put in place to source deals and projects.

The goal of the agreement is to create several funds based on this model and to help establish market standards. It aims to raise €1 billion within three years, including a €60 million initial commitment by the EIB.

Ambroise Fayolle, EIB vice-president said a “significant financing gap persists and huge potential is still waiting to be tapped in some green debt segments”.

Amundi chief executive Yves Perrier, said: “[The programme] offers a particularly innovative investment solution to institutional investors wishing to help finance the energy transition and diversify their sources of yield in a low interest rate environment.”

He said the programme would combating global warming.

Amundi and the EIB said to meet its climate commitments under the Paris Agreement and finance the associated energy transition, Europe is missing an estimated €180 billion in financing a year until 2030. To reach this level of investment, green finance “must mobilise all of the debt capital markets”.

©2019 funds europe

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