BIS unveils green bond fund to finance sustainable projects in APAC

The Bank for International Settlements (BIS) has launched a green bond fund that is dedicated to aid the financing of green projects in Asia Pacific.

The Asian Green Bond Fund will join two other green bond funds that have been issued by the BIS since 2019. Together, they will manage $3.5bn in green bonds for central banks and other official sector investors – with the hope that the funds will continue to grow as reserve managers’ sustainable investment practices develop.

According to BIS, the new funds offer central banks, both in Asia and beyond, opportunities to invest in high-quality bonds issued by international finance institutions, sovereigns and corporates that comply with strict international green standards.

These bonds will help finance environmentally friendly projects in areas such as renewable energy production and energy efficiency in APAC. The Asian Green Fund is a US dollar-denominated, open-ended fund.

The fund, BIS claims, will undergo annual reviews to ensure that it continues to be reflective of the shifting green finance landscape. BIS will also produce a dedicated annual impact report for investors for the green bond fund.

BIS banking department head Peter Zoellner said, “The Asian Green Bond Fund is a strong and welcome addition to the two existing green bonds funds at the BIS. Coming on the heels of COP26, it demonstrates once again the steadfast commitment of the BIS to provide a much needed and secure vehicle for global central banks in their efforts to support environmentally friendly investments.”

BIS chief representative for the APAC region Siddharth Tiwari added, “Partnership is key in our combat against climate change, particularly in a region as vulnerable to climate change as Asia. The BIS can play a role as catalyst in bringing the central banking and development communities together in support of our global effort. Asia is the right place to start this collaboration.”

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