EBRD and PGGM to mobilise €250m of sustainable development finance

By Nigina Mirbabaeva

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  • EBRD and PGGM launch an institutional co-investment partnership to mobilise €250 million of European pension-fund capital
  • Investments to be in climate finance and areas that support the Paris Agreement goals of EBRD investee economies
  • EBRD committed to mobilising more private-sector finance; PGGM a key partner in catalysing new investment

The European Bank for Reconstruction and Development (EBRD) and pension investor PGGM Vermogensbeheer B.V. (PGGM Investment Management) are joining forces to mobilise €250 million of European pension-fund capital. Under the new partnership, PGGM will provide capital for investments that support the transition to more sustainable, low-carbon economies across the EBRD regions.

Through the partnership, PGGM will invest in climate finance on behalf of Pensioenfonds Zorg en Welzijn over the next three years, scaling up its exposure to the asset class and increasing the share of its portfolio focused on climate-resilient development.  

The new initiative provides investors with the opportunity to benefit from the EBRD’s long-standing track record of successfully investing in key economic sectors across central and eastern Europe, the Caucasus and Central Asia, as well as the western Balkans, Turkey and southern and eastern Mediterranean regions. All investments are linked to climate and the Sustainable Development Goals (SDGs), while offering attractive risk-adjusted returns combined with robust environmental, social and governance (ESG) safeguarding.

At the same time, the EBRD will benefit from a new and reliable source of funding for its loans, as well as increased engagement with an institutional investor that shares the same long-term vision and impact goals for the underlying projects.

Expanding partnerships with private institutional investors is fundamental to scaling up the flow of capital to the EBRD’s regions for climate-smart solutions consistent with the goals of the Paris Agreement. The EBRD and PGGM’s mobilisation efforts facilitate the sustainable flow of finance into the EBRD’s economies, to support the EBRD’s aim of doubling private co-financing by 2025, with a particular focus on climate action.

EBRD First Vice President Jürgen Rigterink said: “Tackling climate change and accelerating the transition to low-carbon economies requires large-scale investments. The EBRD is working collaboratively to speed up financing from private capital in a consistent manner, while continuing to work on new products to deliver a low-carbon economy. In this context, the partnership with PGGM is a landmark initiative and a testimony to the EBRD’s commitment to substantially advancing its private-sector mobilisation agenda.”

Soha Elturky, EBRD Vice President and CFO, said: “We are delighted to have established this partnership with PGGM. The launch of this cooperation demonstrates the EBRD’s strong commitment to engaging actively with European institutional investors. The Bank plays a key role in bridging the gap between development finance institutions and institutional investors to enable critical market expansion in addressing SDG- and climate-related challenges. We look forward to working closely with the PGGM team in supporting and financing the economies where we invest in their SDG goals.”

Ricky Singh, Senior Investment Manager, Emerging Markets Credit at PGGM, said: “This partnership with the EBRD represents a new milestone for PGGM’s investment strategy. PGGM is committed to combining attractive risk-adjusted returns with impact investing. There are immense possibilities to have a significant impact on emerging countries, so through this partnership, we hope to source such opportunities that adhere to the SDGs on which PGGM is focusing. With our two organizations’ values very much aligned, we look forward to working more closely with the EBRD to further mobilize pension capital while benefiting from the EBRD’s strong local expertise and high underwriting standards, in combination with our shared commitment to making an impact.”

The EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in almost 40 economies across three continents. The EBRD is owned by 71 countries, as well as the European Union (EU) and the European Investment Bank (EIB). EBRD investments aim to make the economies in the Bank’s regions competitive, inclusive, well-governed, green, resilient and integrated.  

PGGM Investment Management is part of the Dutch not-for-profit pension fund service provider PGGM. It fulfils a social mandate: the sustainable investment of the pension capital of around 3 million participants in PFZW, the pension scheme for the Dutch health and welfare sector. As of 30 September 2022, PGGM Investment Management managed €231 billion in public and private markets globally. With the capital entrusted to it, the fund aims not only to generate good and stable financial returns, but also to have a positive impact on society, focusing in particular on the themes of climate and health. 

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