Allianz Global Investors accelerates its drive in blended finance

• AllianzGI has raised more than 2.5 billion dollars in commitments across 5 blended finance vehicles since 2017
• AllianzGI is targeting the launch of a climate solutions blended debt strategy focused on Emerging Markets in partnership with Allianz Group and a regional Development Finance Institution
• AfricaGrow announced a new investment
• The Emerging Markets Climate Action Fund is already operational and making its first investments while raising additional concessional capital.

Allianz Global Investors is accelerating its drive in blended finance. Blended finance mobilizes private capital in innovative public/private partnerships resulting in risk-adjusted structures and invest in projects that support the achievement of the United Nations Sustainable Development Goals (“SDGs”) in developing countries.  AllianzGI is an experienced blended finance asset manager and has raised more than 2.5 billion dollars in commitments across 5 blended finance vehicles since 2017. Evidence of the scale and durability of AllianzGI’ blended finance program can be seen in its growing product pipeline.

Matt Christensen, Global Head of Sustainable and Impact Investing, comments:  “Given the increasing shortfall in investment capital needed to finance the UN Sustainable Development Goals, it has become obvious that the involvement of the private sector will be crucial going forward. As a public-private finance partnership with appropriate risk structuring, blended finance provides urgently needed funds into emerging and developing countries. These strategies are excellent examples of concrete, innovative, and market-led approaches to mobilising private investments and enhancing multilateral finance and collaboration. Blended finance is an area where AllianzGI’s teams already have a strong reputation for being front-runners.” 

Allianz Climate Solutions Emerging Markets (“ACSEM”) Strategy

AllianzGI is targeting the launch of a climate solutions blended debt strategy focused on Emerging Markets ( “ACSEM)”), in partnership with Allianz Group and a regional Development Finance Institution (“DFI”). This will be AllianzGI’s third blended finance debt strategy and it is expected to be a USD 1 billion risk tiered structure that will invest alongside DFIs in Paris Agreement-aligned projects. The strategy will therefore target assets in low carbon sectors taking into account both climate mitigation and adaptation considerations. This innovative approach includes investments across energy, resilient/transition infrastructure, financial institutions, agricultural business, manufacturing and services. 

Emerging Markets represent some of the largest polluters in the world but also drive economic and population growth. Redirection of financing and economic and social transformation is therefore required to achieve the Paris Agreement targets to limit global temperature increases to 1.5 degrees. ACSEM’s goal is to help reduce the impact of climate change and finance the low-carbon and climate-resilient transition in Emerging Markets. 

ACSEM will be a true partnership between the private and public sector and will raise private capital from institutional investors as well as public and philanthropic entities. It will incorporate a risk tiered structure whereby junior capital will absorb the first losses of the portfolios. With this initiative, AllianzGI aims to create an attractive solution for investors to access Emerging Markets in a de-risked and scalable way, while mobilizing significant capital towards climate solutions in the markets where funding is needed the most. 

AfricaGrow

AllianzGI also announced today that AfricaGrow recently invested in Ventures Platform, an early-stage pan-African Venture Capital firm based in Nigeria that provides early catalytic capital to West African tech startups. Launched in 2019, AfricaGrow is the innovative central financing instrument of the German government’s Compact with Africa (CwA) initiative, with €200 million co-funding from KfW on behalf of the German Federal Ministry and Allianz insurance companies. AfricaGrow is a fund of funds which supports small- and medium-sized enterprises and start-ups on the African continent by investing in Pan-African regional and country-specific private equity and venture capital funds with proven track records and capacities. 

AfricaGrow has so far committed more than 80 million euros with an additional 25 million in an advanced stage of approval. The fund is already meeting its objective of generating positive social and/or economic impact - by end 2021, 4 of its portfolio funds have created and sustained nearly 15,000 direct jobs, thereof 3,520 women, and have paid over €83 million in wages and €11 million in corporate taxes as measured by AllianzGI’s proprietary Impact Framework.

EMCAF

The Emerging Markets Climate Action Fund (EMCAF) is targeted as an innovative €600m blended finance fund initiated jointly by the European Investment Bank (EIB) and Allianz Global Investors (AllianzGI). EMCAF provides critical early-stage equity financing to greenfield climate transition infrastructure in emerging and developing markets, focusing on climate mitigation, climate adaptation, and environmental projects. During its summit in Elmau (Germany) in June 2022, the Group of Seven (G7) endorsed EMCAF as an example of a concrete and market-led approach to mobilise private investments for climate-relevant infrastructure and enhance multilateral finance collaboration. The Fund’s existing investors include: KfW on behalf of the German Government, the Nordic Development Fund, and the Government of Luxembourg in the Fund’s junior tranche, and Allianz Insurance Companies, Folksam and EIB in the senior tranche. 

The Fund is already operational and making its first investments while it raises additional concessional capital that is required to unlock the full volume of its private senior tranche commitments. Its first investment is ARCH Cold Chain Solutions East Africa Fund, a strategy financing temperature-controlled storage and distribution infrastructure in East Africa that seeks to generate emissions reduction from post-harvest food loss and improve food security. More investments will be announced at COP27 in November.

For further Information, please contact:  

Marion Leblanc-Wohrer Email: marion.leblancwohrer@allianzgi.com
Stefan Lutz Email: stefan.lutz@allianzgi.com

About Allianz Global Investors:  

Allianz Global Investors is a leading active asset manager, managing EUR 578 billion in assets for individuals, families and institutions worldwide. By being active and investing for the long term, our goal is to elevate the investment experience for our clients and generate value every step of the way.

Active is: Allianz Global Investors

Data as at 30 June 2022. On 25 July 2022, AllianzGI completed the transfer of investment teams (including 87 Investment Professionals) and USD 101bn of assets they manage to Voya Investment Management as part of a strategic partnership. Two thirds of the assets continue to be managed on behalf of AllianzGI clients outside of the US.