NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, April 7, 2016

A consortium of leading financial institutions and investors today announced a new partnership under the Catalytic Finance Initiative (CFI) to direct $8 billion in total commitments toward high-impact sustainable investments. Partners joining the CFI include AllianceBernstein (AB); Babson Capital Management LLC, a subsidiary of Massachusetts Mutual Life Insurance Company (MassMutual); Crédit Agricole CIB; European Investment Bank (EIB); HSBC Group; International Finance Corporation (IFC), a member of the World Bank Group; and Mirova, a subsidiary of Natixis Group, all of which have pledged capital and expertise to develop and advance innovative financing structures for investments in clean energy and other sustainability focused projects. In addition, the Aligned Intermediary, representing a group of long-term institutional investors, will collaborate on specific investment opportunities with members of the partnership. This announcement follows last year’s ratification of the United Nations Sustainable Development Goals (SDG) and the historic climate agreement in Paris. It aims to promote the SDG objectives, including acting on climate change and advancing access to clean energy and water.

The CFI was originally launched by Bank of America in 2014 with a $1 billion commitment and a goal to stimulate at least $10 billion in new investment into high-impact clean energy projects through additional partnerships. Today, it has expanded to include several leading financial organizations with their own capital commitments. By working together, this leading group of global financial institutions and investors can combine their efforts to increase funding and significantly accelerate the transition to clean energy solutions and advancing the SDGs.

CFI partners bring expertise in a broad range of financial specialty areas. This includes clean energy infrastructure finance, green bonds, project finance, green asset-backed securities, emerging markets investment and advisory assistance, and approaches to blending public and private finance.

In a joint statement, CFI partners highlight the importance of this initiative:

“Financial innovation and capital play a critical role in the transition to a low-carbon economy. Through the Catalytic Finance Initiative and this joint partnership, together we can support the transition to a low-carbon economy and sustainable growth. By providing $8 billion in commitments, we can help to advance new investment opportunities in clean energy as well as other sustainable development goals and achieve the necessary scale for a positive impact on climate change.”

The Aligned Intermediary
The Aligned Intermediary (AI) is a new investment advisory group created to help large scale, long-term investors (LTIs) channel significant amounts of institutional capital into climate infrastructure investments including clean energy, water infrastructure, and waste-to-value projects. The AI will guide its LTI partners — sovereign funds, pension funds, endowments, insurance companies, family offices, and foundations — around all levels of capital investment; early-stage, growth and project finance.

Specifically, AI will source, screen, conduct due diligence, and structure transactions that satisfy specific goals related to risk-adjusted financial rates of return for each partner, as well as assist in deal monitoring and facilitating post-close value creation for the life of an investment when requested.

Additional information about AI can be found at www.alignedintermediary.org.

AB
AB is a leading global investment management firm that offers high-quality research and diversified investment services to institutional investors, individuals and private wealth clients in major world markets.

At December 31, 2015, AB Holding owned approximately 36.7% of the issued and outstanding AB Units and AXA, one of the largest global financial services organizations, owned an approximate 62.8% economic interest in AB.

Additional information about AB may be found on our website, www.abglobal.com.