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Allianz Global Investors targets $1 billion for blended finance debt fund




LONDON (Reuters) – Allianz Global Investors said on Wednesday it was seeking to raise $1 billion for its third blended finance fund, a blend of concessional and institutional capital seen as a crucial route to increasing private investment in economies. emerging.

Blended finance is likely to be at the center of world leaders’ minds at the COP27 climate talks in Egypt from next week, as policymakers seek to close the historic climate finance gap in emerging markets. .

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

Allianz and DFI will help find projects in 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 company has so far raised $2.5 billion in five blended debt and equity funds since 2017.

Private finance in developing economies hit a record $250 billion last year, according to the International Monetary Fund, but needs to more than double by 2030 to stay on track to meet the global climate goal , according to a study by the London School of Economics.

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

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