Allianz Global Investors Aims to Raise $1B for Fund Focusing on Climate Resilience

Allianz Global Investors on Wednesday said it is looking to raise $1 billion for its third blended finance debt fund, a mix of concessional and institutional capital seen as a crucial route to scaling up private investment in emerging economies.

Blended finance is likely to be a key focus for world leaders at the COP27 climate talks in Egypt starting next week, as policymakers look to address the historic shortfall in climate-related finance in emerging markets.

The Allianz Climate Solutions Emerging Markets (ACSEM) strategy, which AllianzGI will manage, will include investment from its parent, German insurer Allianz, as well as an unknown regional development finance institution (DFI).

Both Allianz and the DFI will help source projects across a range of low-carbon sectors including energy, infrastructure and agriculture, with a focus on both climate adaptation and resilience.

The fund will be AllianzGI’s third blended finance debt strategy. The firm has so far raised $2.5 billion across five blended finance funds in both debt and equity since 2017.

Private finance in developing economies hit a record $250 billion last year, according to the International Monetary Fund, but must more than double by 2030 to keep on track to hit the world’s climate goal, a London School of Economics study said.

Blended finance is a form of investment that aims to encourage commercial investors into riskier projects by raising money from concessional investors such as development finance institutions or philanthropies.

(Reporting by Virginia Furness; editing by Simon Jessop and Mark Porter)