News: ABN Amro unveils e200m 'sustainable' pvt equity fund
(TNN 15/05/2006) Mumbai - It’s the latest in investment strategy that is catching on the world over and ABN Amro is among the early movers in India. Socially responsible investing is finding increasing acceptance among investors with a number of ‘sustainable’ private equity funds being launched globally.
The Netherlands-based ABN Amro Bank has promoted a global private equity fund for investing in renewable energy and clean technology, which will take off in September ’06. Confirming the development, Herman Mulder, the senior executive vice-president of group risk management, co-chairman of ABN Amro Bank, said, “The e150-200m fund will be used for financing infrastructure projects that are environment-friendly. However, the exact proportion of the fund that would find its way into the Indian market has not been decided as yet.”
The bank has so far identified opportunities for sustainability products and services in areas like futures trading for soft commodities, carbon clearing, carbon trading and finance, financing of renewable energy projects and weather derivatives. In its global sustainability report for ’05, the bank has chosen development of lending products backed by emission allowances and implementation of a global energy efficiency programme as part of its key agenda.
According to the report, the broad action plan for ’06 includes establishing a knowledge centre to provide data on key business sectors, building up on the assessment of the coffee supply chain and investigating the bank’s role in other agricultural supply chains.
The bank also plans to develop a business and risk energy policy to more proactively assess involvements in the energy space. With a view to create a level-playing field in infrastructure-financing on a global scale, the bank is currently in talks with other Indian banks to spread awareness on adherence to the Equator Principles, formulated in co-ordination with the International Finance Corporation (IFC). A senior official of ABN pointed out that most domestic banks are wary that adherence to the Equator Principles could clash with the local regulations and fear the government’s reactions on these issues.
The official further said that although most banks privately acknowledge the need for having such principles in place, there is still a lack of awareness about the internal expertise and infrastructure needed to establish a sizeable presence in the international market.
Essentially, these principles aim at setting up a financial industry benchmark for management of environmental and social risks encountered in project financing. As of now, major multinational banks present in India like Citigroup, ABN Amro, HSBC and StandardChartered Bank have already announced adherence to these principles.
The Netherlands-based ABN Amro Bank has promoted a global private equity fund for investing in renewable energy and clean technology, which will take off in September ’06. Confirming the development, Herman Mulder, the senior executive vice-president of group risk management, co-chairman of ABN Amro Bank, said, “The e150-200m fund will be used for financing infrastructure projects that are environment-friendly. However, the exact proportion of the fund that would find its way into the Indian market has not been decided as yet.”
The bank has so far identified opportunities for sustainability products and services in areas like futures trading for soft commodities, carbon clearing, carbon trading and finance, financing of renewable energy projects and weather derivatives. In its global sustainability report for ’05, the bank has chosen development of lending products backed by emission allowances and implementation of a global energy efficiency programme as part of its key agenda.
According to the report, the broad action plan for ’06 includes establishing a knowledge centre to provide data on key business sectors, building up on the assessment of the coffee supply chain and investigating the bank’s role in other agricultural supply chains.
The bank also plans to develop a business and risk energy policy to more proactively assess involvements in the energy space. With a view to create a level-playing field in infrastructure-financing on a global scale, the bank is currently in talks with other Indian banks to spread awareness on adherence to the Equator Principles, formulated in co-ordination with the International Finance Corporation (IFC). A senior official of ABN pointed out that most domestic banks are wary that adherence to the Equator Principles could clash with the local regulations and fear the government’s reactions on these issues.
The official further said that although most banks privately acknowledge the need for having such principles in place, there is still a lack of awareness about the internal expertise and infrastructure needed to establish a sizeable presence in the international market.
Essentially, these principles aim at setting up a financial industry benchmark for management of environmental and social risks encountered in project financing. As of now, major multinational banks present in India like Citigroup, ABN Amro, HSBC and StandardChartered Bank have already announced adherence to these principles.
posted by InCar Group Press Room at 16:00
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