Published: September 30, 2024
The Moody’s rating is a milestone for the climate-oriented fund, which has been active in emerging markets since 2009. So what will GCPF be turning its attention to next?
On September 6, Moody’s announced that the Global Climate Partnership Fund (GCPF) had been rated A3 with a stable outlook. Though active since 2009, this was the first time GCPF had received a rating. According to Moody’s, the A3 grade (an upper medium rating) was underpinned by solid liquidity and a decent funding profile, along with moderate capital adequacy.
Ewout van der Molen is head of climate finance at responsAbility Investments AG, the asset manager for GCPF. He remarks that Moody’s rating is a significant milestone for the fund.
“It shows that investing in impact and climate finance in emerging markets can generate sound returns at a verified, transparent risk versus reward ratio,” he tells EMEA Finance. “We believe that it offers a very attractive opportunity to investors to continue engaging with the fund.”
GCPF’s growth story
Billing itself as ‘much more than a green lender’, GCPF provides finance for climate-relevant projects in developing countries. It started out as a joint initiative from the Danish, German and UK governments, in partnership with the private sector. The idea was to promote green lending in emerging markets.
“Green lending was already an emerging market segment in the developed world, but they thought it was important to expand that,” recalls van der Molen. “They decided to set up a blended fund structure in which the governments would invest in the first loss tranche, and structure a second loss and third loss tranche on top of that. From the beginning, it was important that the fund would also mobilise private capital.”
Early investors included the German development bank KfW, the Dutch development bank FMO, the International Finance Corporation (IFC), the World Bank, the European Investment Bank, and many more.
Once responsAbility came on board as asset manager, in 2013, the fund’s growth trajectory started in earnest. Starting with just 11 investees in 2013, all of whom were financial institutions, the fund now has more than 60 investees across more than 30 countries. Meanwhile, the total amount of private capital in the fund has soared from around US$20mn in 2013, to over US$200mn today.