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Multicountry: Asia Climate Bond Portfolio

SUMMARY

STATUS
Approved
MEMBER
Multicountry
SECTOR
Financial Institution
PROJECT NUMBER
000312

FINANCING

PROJECT TYPE
Stand-alone
APPROVED FUNDING
USD500 million
FINANCING TYPE
Nonsovereign

TIMELINE

CONCEPT REVIEW
May 21, 2019
APPRAISAL REVIEW/FINAL REVIEW
July 5, 2019
FINANCING APPROVAL
August 27, 2019

OBJECTIVE

The objective is to develop the climate bond markets through the establishment of a managed fixed income portfolio. The project seeks outperformance by identifying, analyzing and selecting climate champions—issuers who are well placed to thrive in the coming climate change environment. Selection of climate champions will be based on the Climate Change Assessment Framework.

DESCRIPTION

The project seeks to address the underdevelopment of the climate bond market in AIIB members through a managed fixed income portfolio of USD500 million. It expects to mobilize another USD500 million from climate change-focused institutional investors. The project also seeks to allocate a portion of the investment proceeds for market education, engagement and issuer support.

PROJECT FINANCING

For more information about project financing, please review the project summary.

ENVIRONMENTAL AND SOCIAL INFORMATION

The project involves the setting up of a managed portfolio of Climate Bonds and will make use of an environmental, social and governance (ESG) framework, similar to the one approved for the Asian ESG Enhanced Credit Managed Portfolio, and consistent with the spirit and vision of AIIB’s Environmental and Social Framework. The ESG will be enhanced with climate change criteria to ensure the project meets its investment objectives. Based on the previous ESG Framework, AIIB will work with the investment advisor to ensure that the project can achieve its development objectives. The investment policy will incorporate the following:

  • Corporate-level exclusion criteria
  • Watchlist and escalation process
  • Eligibility criteria for defining Climate-aligned Bonds based on share of revenue derived from climate-aligned projects or solutions
  • Assessment of an issuers’ Green Bond framework (focusing on transparency and disclosure level) in the case of Green Bonds
  • Best-in-class impact reporting at a portfolio level.

In view of the application of this ESG framework, the project will make use of a derogation from the application of AIIB’s Environmental and Social Policy (ESP), which is designed to apply to more conventional investment projects where creation of physical assets is being financed and has not envisaged projects such as this one, where environmental and social compliance is more suitably assessed at the corporate rather than asset level. Given this derogation, the Policy on the Project-Affected People’s Mechanism (PPM) would also not apply to this project.

 

PROJECT TEAM LEADER

Stefen Shin

Principal Investment Officer, Capital Markets

stefen.shin@aiib.org

 

BORROWER

N/A

 

IMPLEMENTING ENTITY

Vanessa Wang

MD and Head of North Asia Institutional Business, Amundi

Vanessa.wang@hk.amundi.com

 

PROJECT DOCUMENTS

CLIENT/COFINANCING PARTNER DOCUMENTS

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