EMCAF Reaches €450 Million with Final Contribution from Germany

The fund, launched in 2021, is now one of the largest blended finance equity funds globally, dedicated to supporting climate mitigation and adaptation projects in emerging and developing markets.

The Emerging Markets Climate Action Fund (EMCAF), a collaborative initiative between the European Investment Bank (EIB) and Allianz Global Investors (AllianzGI), has successfully reached €450 million in total contributions, following a final €20 million boost from the German government through the Kreditanstalt für Wiederaufbau (KfW) on behalf of the German Federal Foreign Office. The fund, launched in 2021, is now one of the largest blended finance equity funds globally, dedicated to supporting climate mitigation and adaptation projects in emerging and developing markets.

EMCAF’s closing size of €450 million is set to catalyze up to €7.5 billion in climate finance across emerging markets. Renewable energy and energy efficiency account for the bulk of EMCAF’s investments to date, but it also covers sustainable transport, water supply, wastewater management, and forestry projects. The fund plans to invest in about 15 funds, which will subsequently support around 150 projects aimed at reducing greenhouse gas emissions, addressing the impacts of climate change, and fostering environmental sustainability.

“The success of EMCAF highlights the power of public-private partnerships in bridging the global climate finance gap,” stated EIB Vice-President Ambroise Fayolle. He further stressed that the EIB, as the climate bank, would continue to prioritize innovative financial instruments to help developing countries accelerate their green transitions and adapt to climate change.

G7’s Support and Impactful Investments

In 2022, the Group of Seven (G7) countries recognized EMCAF as a groundbreaking, market-driven approach to mobilizing private investments in climate infrastructure. This endorsement positioned the fund as a key player in the global effort to address climate change through innovative financial solutions.

AllianzGI CEO Tobias Pross emphasized that the closure of the fund marked a significant milestone in driving climate action in the regions most in need. “This investment is not just about sustainable solutions but about securing the future of our planet,” he remarked, highlighting the importance of continued collaboration for lasting environmental change.

Early Achievements and Global Impact

Since its announcement at the United Nations Climate Change Conference in Glasgow in November 2021, EMCAF has already made substantial investments. In 2023 alone, the fund allocated $100 million to support renewable energy, sustainable mobility, and green infrastructure projects across Africa, Asia, and Latin America. These included investments in the Helios CLEAR Fund, AIIF4 Climate Investment Fund, Southeast Asia Clean Energy Fund II, and Exagon Latin America Fund I.

In its second impact report for the year 2023, EMCAF reported that, despite being in the early stages of its portfolio development, the fund has already mobilized significant capital and achieved its first climate impact milestones. This includes the reduction of approximately 800,000 metric tons of greenhouse gas emissions.

Continued Support from Germany and Other Key Partners

Germany’s KfW has been an essential partner in EMCAF, investing on behalf of several German government ministries. KfW Director Stephanie Lindemann-Kohrs remarked that equity investments in climate mitigation and adaptation projects have proven to be a powerful impact investment theme, further noting that the final contribution to EMCAF helps leverage private capital for critical climate projects in emerging markets.

Other investors in the fund include the EIB, the Government of Luxembourg, the Nordic Development Fund (NDF), the United Kingdom Foreign, Commonwealth & Development Office, Allianz insurance companies, Folksam insurance companies, and EIB Global, the development arm of the European Investment Bank.

Satu Santala, Managing Director of NDF, praised the fund for its innovative structure and its ability to mobilize investments that not only address climate change but also improve the lives of people in the world’s most vulnerable regions. She also highlighted the collaborative strength between Allianz and the EIB, which has been instrumental in achieving EMCAF’s scale and success.

Aiming for Sustainable Climate Solutions

EMCAF’s impact goes beyond financial mobilization; it is driving investments into tangible projects that provide sustainable solutions for emerging and developing regions. By continuing to support the scaling of climate mitigation and adaptation efforts, the fund is playing a crucial role in addressing the most pressing environmental challenges of our time.

With its ability to attract private sector investments and its focus on high-impact, climate-focused projects, EMCAF is positioned to become a transformative force in the global climate finance landscape. As the world moves toward a greener, more sustainable future, initiatives like EMCAF are vital in ensuring that developing nations are equipped to tackle climate change effectively and equitably.