The Asian Infrastructure Investment Bank (AIIB) – the China-based “Lean, Clean, Green” development bank which has just awarded a mandate to Aberdeen Standard Investments for green and unlabelled infrastructure bonds – is also working with Amundi on a $500m Asian Climate Bond Portfolio.
The new project seeks to address the “under-development of the climate bond” market in AIIB members. It expects to mobilize another $500m from “climate change focused institutional investors”.
It will found “climate champions” that are “well placed to thrive in the coming climate change environment”.
It will use the same ESG framework that was developed for the $500m Asia ESG Enhanced Credit Management Portfolio launched today.
According to project documents, the estimated date of financing approval is in the third quarter of this year.
The enhanced credit brief forms part of AIIB’s Sustainable Capital Markets Initiative which aims to develop Asia’s ESG market through improved disclosure, enhanced ESG ratings coverage and higher standards.
The strategy is intended as a “proof of concept” for the initiative. It’s underlying framework and methodology is anticipated to be made freely available to be subsequently scaled-up by investors down the line.Paul Lukaszewski, Aberdeen Standard’s Head of Corporate Debt – Asia and Australia told RI: “This is the first dedicated ESG investment strategy for the Asian credit market. What makes it even more unique is the infrastructure focus.
“Due to its innovative nature, we would expect the strategy to initially appeal to institutional investors, sovereign wealth funds, and large pension funds.
“Over a longer term basis, it should appeal to retail investors as well.”
The announcement was made during the bank’s annual meeting in Luxembourg – the first to be held outside of China – along with a $75m allocation to the Asia Investment Fund (AIF), a Chinese-seeded private equity fund domiciled in Hong Kong. The fund will invest in telecommunication, transportation and energy sectors, and aims to raise $3bn in 10 years.
The AIIB was established in 2016 to opposition from the US which actively lobbied allies against joining, citing concerns about its governance. The new regional development bank was widely perceived as an expansion of Chinese “soft power” in the Western-dominated international development field