The Capital Markets Mechanism (CCMM) of the Climate Investment Funds (CIF) has issued its inaugural bond, raising US$500 million from a US$3 billion orderbook.
Tariye Gbadegesin, CIF CEO, commented: “The inaugural CCMM bond issue has exceeded all expectations, with our order book over six times over-subscribed. This is an enormous vote of confidence and a sign of the keen market interest in backing high-quality clean energy projects. These bonds will multiply the funds available for scaling-up clean technology and infrastructure in developing countries – not in ten years, but now, when it’s most critically needed.”
CCMM frontloads future reflows from operations funded by CIF’s Clean Technology Fund (CTF), which aims to reduce the financing gap for energy transitions boosting climate funding in developing countries. The World Bank acts as treasury manager.
The three-year bond, which was announced at COP29 last November, is the first issuance under CCMM’s borrowing programme. It will be listed on the LSE’s International Securities Market.
Fixed pricing was set at +36.6 basis points, making the re-offer semi-annual yield 4.838% and the re-offer price 99.757%.
Of the US$3 billion orderbook, more than half (51%) of investment came from asset managers, insurance and pension funds. Central banks and official institutions made up 36% of investors, while banks, bank treasuries and corporates constituted the remaining 13%.
Geographically, 64% of investors were based in EMEA, 31% in the Americas and 5% in Asia.
Alongside the CTF, CIF also runs the Strategic Climate Fund (SCF). Funding for these projects is channeled through six triple A-rated multilateral development banks, namely the World Bank Group, including the International Finance Corporation, the African Development Bank, the Asian Development Bank, the European Development Bank, and the Inter-American Development Bank.
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