44671 - IFC BEST Bond Fund

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Summary of Investment Information

Project Number

44671

Company Name

Amundi Planet II, SA SICAV-RAIF

Date SPI Disclosed

Dec 13, 2021

Country

World Region

Region

Global

Projected Board Date

Oct 28, 2021

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Mar 27, 2024

Department

Products Clients and Innovation

Industry

Funds

Previous Events

Approved : Oct 28, 2021
Signed : Nov 14, 2023
Invested : Nov 29, 2023

Sector

Other Sector Fund

Additional Project Attributes

Blended Finance

Project Description

The project involves IFC sponsoring the Build-Back-Better Emerging Markets Social, Sustainability, and Sustainability-linked Transaction Bond Fund (the “Fund”) with a target size of US$1 - 2 billion, managed by Amundi Asset Management (“Amundi” or “the Asset Manager”). The Fund will mobilize international investor funding for investments in social, sustainability, sustainability-linked and green bonds issued by emerging market real sector firms, financial institutions, projects, and sub-sovereigns, where the relevant transactions support COVID-19 relief efforts and/or promote an inclusive and resilient recovery from the pandemic while at the same time consolidating market standards for these nascent asset classes. The Fund will have a capital structure that transforms risk associated with a portfolio of mostly sub-investment grade emerging market bonds into a senior tranche characterized by risk that is well in investment grade territory and a subordinated tranche which provides credit-enhancement for the latter. The project is expected to be supported by IDA19 Private Sector Window Blended Finance Facility as described in the Blended Finance Section.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.0
Equity	200.0

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to SME Borrowers
Straight Senior Loan	Climate (not covered in any category)
Straight Senior Loan	Housing Finance
Straight Senior Loan	Loans to Microfinance Borrowers
Straight Senior Loan	Loans to Woman-Owned SMEs

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The main project-level outcome is improved access to private sector capital for issuers of Sustainable Bonds in EMDEs through mobilization of capital from institutional investors to specifically invest in Sustainable Bonds issued by EMDE entities. This is expected to encourage increased issuances of Sustainable Bonds by EMDE issuers. Beyond this outcome, IFC anticipates the proposed investment will catalyze change in the market through increased issuance of Sustainable Bonds in EMDEs and thereby promote greater integration in the market via innovation, demonstration, and replication channels.

It is anticipated that the project will provide both financial and non-financial additionality. Financial additionality will take the form of: (i) IFC own account equity as IFC provides patient risk capital enabling the Fund to achieve its target size, and (ii) Resource Mobilization emanating from IFC’s effort to mobilize additional financing from institutional investors through credit enhancing the senior tranche of the Fund. Non-financial additionality will be derived from Knowledge, Innovation and Capacity Building facilitated by the Technical Assistance Facility to ensure that standards of Sustainable Bonds invested in by the Fund are high, thereby serving as a reference in the market.

E&S Category Rationale / Risks and Mitigation

The project will support investments in social, sustainability, sustainability-linked and green bonds issued by emerging market real sector firms, financial institutions, projects, and sub-sovereigns, where the relevant transactions support COVID-19 relief efforts and/or promote an inclusive and resilient recovery from the pandemic. As part of the Project, the Asset Manager will maintain a medium E&S risk profile of the portfolio and exclude investments in bonds supporting assets exposed to considerable E&S risks such as significant resettlement, impacts on critical habitats, impacts on Indigenous Peoples, significant impacts on local communities or impacts on critical cultural heritage. The Project will also exclude support to coal-related activities and issuers with significant investments in fossil fuels. Therefore, this transaction has been categorized as FI-2 according to IFC’s Sustainability Framework. The Asset Manager will screen and monitor each issuer to exclude assets with significant E&S and reputational risks as defined in the Performance Standards and the Exclusion List, as well as those not meeting relevant national E&S laws.

Amundi’s ESG policy, and also ESG analysis, is based on international conventions such as the United Nations Global Compact, the Organization for Economic Co-operation and Development (OECD) guiding principles on corporate governance, the International Labour Organization (ILO), and others. The elements of Amundi’s ESG policy include: ESG analysis of companies (summarized by an in-house ESG rating; Targeted exclusion policy; Distribution of ESG ratings to all managers; Engagement policy to support companies move towards better ESG practices; and Voting policy that incorporates ESG-related issues (when the Company has voting rights). Amundi’s ESG analysis is tailored according to sector risk and the policy is reviewed annually.

The Amundi Planet II SEED ESG Charter outlines the ESG framework for the Fund, designed to stimulate the issuance of sustainable bonds (green, social, sustainability, and sustainability-linked) in emerging markets, especially in response to the socioeconomic impacts of COVID-19. The Charter aligns investments with key sustainable development goals and the Paris Agreement by enforcing strict ESG screening criteria across issuer-level exclusions, sustainable bond eligibility, portfolio monitoring, and impact reporting.
All bonds must adhere to standards set by organizations such as the International Capital Market Association (ICMA), and the Fund prioritizes investments with clear COVID-19 mitigation or recovery outcomes. The Charter also introduces a multilayered governance and compliance process including third-party ESG assessments, quarterly controversy monitoring, and the potential for divestment in the event of violations or reputational risks. Additionally, an independent scientific committee will advise on best practices and market developments without participating in fund management. The ESG reporting system requires annual transparency on impact, listing both issuers and project outcomes. Sector-specific ESG criteria are outlined in extensive appendixes which define eligible project categories, target populations, and key performance indicators (KPIs) for social and environmental performance. Overall, the Charter promotes responsible, impactful investment in emerging markets through a rigorous, principles-based ESG strategy.

S.no	Title	Anticipated Completion Date	Status
1	Formalize procedures	01/17/2022	Completed

Contacts

For Inquiries About the Project, Contact

Amundi Asset Management
Eric Dussoubs
Senior Institutional Clients Coverage
+33 6 15 05 07 92
eric.dussoubs@amundi.com
90, boulevard Pasteur, CS 21564, 75730 Paris Cedex 15, France
www.amundi.com

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