BIS Launches APAC Green Bond Fund

Third BIS green bond fund to channel central bank reserves to green projects in the Asia and Pacific region. 

The Bank for International Settlements (BIS) has launched a new green bond fund dedicated to help finance investments in green projects in the Asia and Pacific region.

The ‘Asian Green Bond Fund’ joins two other green bond funds launched by BIS since 2019, one denominated in dollars and one in euros. All three funds are managed in-house by BIS Asset Management.

Together, the funds will manage some US$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, BIS said.

The new fund is US$-denominated, open-ended fund, and 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 said.

Bonds eligible for the new Asian green bond fund have to have a minimum average rating of A- and comply with the ICMA’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, the BIS says. A dedicated annual impact report will be provided to investors.

The BOK (Bank of Korea), BSP (Bangko Sentral ng Pilipinas), NBC (National Bank of Cambodia), and Bank Indonesia were among the first Asian central banks to pledge investment for the new fund.

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