The European Investment Bank (EIB) and Allianz Global Investors (AllianzGI) have teamed up to create the Emerging Markets Climate Action Fund (EMCAF), a private equity fund aimed at mobilising €7.5 billion for climate-focused projects in developing and emerging economies. Launched in 2021, EMCAF is designed to support renewable energy, energy efficiency, and other climate initiatives through blended finance, combining both public and private investments.
So far, the fund has raised €450 million in public funding from European governments, with Germany’s Kreditanstalt für Wiederaufbau contributing the final €20 million on behalf of the German Federal Foreign Office. Private sector backing has come from major insurers, including Allianz and Swedish insurer Folksam, who are also involved in the fund’s operations.
EMCAF’s Impact and Future Investment Plans
In its first year, EMCAF deployed $100 million across four transactions supporting renewable energy, sustainable mobility, and green infrastructure projects in Africa, Asia, and Latin America. Key investments include the Helios CLEAR Fund, AIIF4 Climate Investment Fund, Southeast Asia Clean Energy Fund II, and Exagon Latin America Fund I.
Looking ahead, the EIB and AllianzGI aim to further scale the fund, targeting investments in approximately 15 additional funds. These will support an estimated 150 climate projects, all focused on reducing greenhouse gas emissions and advancing sustainable development in emerging markets. The fund’s strategic focus aligns with global efforts to address climate change by channeling capital into high-impact regions that require substantial investments to transition to low-carbon economies.
Conclusion
EMCAF represents a significant step in leveraging blended finance to drive climate action in emerging markets. By mobilising both public and private funds, the initiative addresses the financing gap that many developing nations face when pursuing sustainable energy and infrastructure projects. With strong backing and a clear investment focus, EMCAF is poised to contribute to the global effort to combat climate change, particularly in regions where the need for climate-related investments is most pressing.
References:
- European Investment Bank. “Emerging Markets Climate Action Fund.”
- Allianz Global Investors. “EMCAF Investment Overview.”
- Kreditanstalt für Wiederaufbau (KfW). “Public Contributions to Climate Funds.”
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