The Bank for International Settlements (BIS) today launched a new green bond fund dedicated to helping finance investments in green projects in the Asia and Pacific region.
The Asian Green Bond Fund joins two other green bond funds issued by the BIS since 2019. Together, the funds will manage some $3.5 billion in green bonds for central banks and other official sector investors, with the expectation that the funds will continue to grow as reserve managers’ sustainable investment practices evolve.
“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,” said Peter Zoellner, Head of the BIS Banking Department.
The new fund offers central banks, both in Asia and beyond, opportunities to invest in high-quality bonds issued by sovereigns, international financial institutions, and corporates that comply with strict international green standards. These bonds help finance environmentally friendly projects in areas such as renewable energy production and energy efficiency in the Asia and Pacific region.
The BIS Asian Green Fund is a US dollar-denominated, open-ended fund and was developed under the guidance of the BIS Asian Consultative Council and in close collaboration with the Asian Development Bank, the broader development financing community and other stakeholders.
BIS green bond funds belong to the BIS Investment Pool (BISIP) family, a format commonly used by BIS Asset Management for its fixed income investment products. They are managed in-house by BIS Asset Management. Bonds eligible for the new Asian green bond fund have a minimum average rating of A- and comply with the International Capital Market Association’s Green Bond Principles and/or the Climate Bond Standard published by the Climate Bonds Initiative.
The fund will undergo annual reviews to ensure that it continues to be reflective of the shifting green finance landscape.
As in the case of the other two green bond funds, the BIS will produce a dedicated annual impact report for investors.