Bank of America Announces $10 Billion Catalytic Finance Initiative to Accelerate Clean Energy Investments That Reduce Carbon ...
September 23 2014 - 3:30PM
Business Wire
CEO Brian Moynihan Speaks at United Nations
Climate Summit
Bank of America today announced a Catalytic Finance Initiative,
designed to stimulate at least $10 billion of new investment into
high-impact clean energy projects. The initiative will focus on
developing or advancing innovative financing structures that reduce
investment risk, thereby attracting a broader range of
institutional investors.
“We want to take a leadership role in helping remove barriers to
investment in clean energy projects around the world,” said Brian
Moynihan, Bank of America chief executive officer. “The capital we
commit and our strong global client and institutional investor
relationships can lead to considerable additional investments in a
lower carbon future.” Moynihan was the only U.S. CEO who spoke
today at the United Nations Climate Summit Finance Session.
As part of the initiative, Bank of America will commit $1
billion in capital to investment structures that employ a range of
de-risking tools, developed in conjunction with development finance
institutions (DFIs), insurance providers, foundations and
institutional investors. The goal of the initiative is to make
clean energy investments more financeable, particularly in emerging
markets where project impact is often amplified – addressing other
large-scale issues like health, education and job creation.
The Catalytic Finance Initiative will broaden the impact of the
bank’s work with partner organizations and ensure that at least $10
billion of incremental capital is deployed in investments in
renewable energy, energy efficiency and energy access. It will
target primarily larger-scale financing opportunities that use
de-risking structures such as first loss and mezzanine tranches,
risk guarantees and new insurance products to crowd-in capital that
would not otherwise be deployed in this sector. The bank will also
explore opportunities to work with foundations and impact-focused
clients to support smaller, energy access opportunities, using
innovative catalytic first-loss capital and other forms of credit
support.
“In recent years, there’s been increased focus on de-risking
tools that can be used to support clean energy and energy
efficiency investment,” said Purna Saggurti, Bank of America
Merrill Lynch chairman of Global Corporate and Investment Banking.
“We look forward to expanding our work with DFIs, investors and
peers to develop approaches to credit enhancement, blended finance
and aggregation structures that will open the door for a rapid rise
in investment in this area.”
“The financing gap is significant, and we really welcome Bank of
America’s leadership in this area. We look forward to working with
them and other global banks to accelerate private sector investment
into renewable energy, energy efficiency and energy access,” said
Rachel Kyte, group vice president and special envoy for Climate
Change, World Bank Group.
"Bank of America's bold contribution demonstrates the leadership
and public-private partnership required to catalyze action towards
a low-carbon economy. Transformative change will follow many such
initiatives,” said Achim Steiner, UN Under-Secretary-General and
executive director of United Nations Environmental Programme.
"It is essential to bring together both private and public
funding if we are to secure the investment needed to address the
problems created by climate change. The European Investment Bank is
committed to supporting clean energy investment around the world.
Initiatives such as Bank of America's for catalytic finance help to
increase the opportunities for institutional investors. We
particularly welcome its clear aim to increase co-operation between
development finance institutions and private capital," said
Jonathan Taylor, European Investment Bank vice president
responsible for climate action.
"Accelerating clean energy investments globally isn't just about
needing stronger government policies that will incentivize
low-carbon technologies. It's also about creating a broader array
of financing vehicles that investors can utilize to stimulate
capital flows. Bank of America's new initiative is hugely important
because it acknowledges this financing gap and aims to help fix
it," said Mindy Lubber, president of Ceres and director of the
Investor Network on Climate Risk.
Bank of America’s $70 billion multi-year environmental
business commitment
Since 2007, Bank of America has dedicated $31.7 billion to
low-carbon and other environmental business activities. In June
2012 in conjunction with the Rio+20 United Nations Conference on
Sustainable Development, Bank of America announced a 10-year, $50
billion environmental business goal to advance lower-carbon
economic solutions through lending, equipment finance, capital
markets and advisory activities, carbon finance and investment
advice and solutions for clients around the world. The $50 billion
commitment followed an initial $20 billion multi-year environmental
business commitment announced in 2007 that was achieved four years
ahead of schedule.
Read more about Bank of America’s commitment to the
environment.
Bank of AmericaBank of America is one of the world's leading
financial institutions, serving individual consumers, small
businesses, middle-market businesses and large corporations with a
full range of banking, investing, asset management and other
financial risk management products and services. The company
provides unmatched convenience in the United States, serving
approximately 49 million consumer and small business relationships
with approximately 5,000 retail banking offices and approximately
16,000 ATMs and award-winning online banking with 30 million active
users and more than 15 million mobile users. Bank of America is
among the world's leading wealth management companies and is a
global leader in corporate and investment banking and trading
across a broad range of asset classes, serving corporations,
governments, institutions and individuals around the world. Bank of
America offers industry-leading support to approximately 3 million
small business owners through a suite of innovative, easy-to-use
online products and services. The company serves clients through
operations in more than 40 countries. Bank of America Corporation
stock (NYSE: BAC) is listed on the New York Stock Exchange.
Visit the Bank of America newsroom for more Bank of America
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Reporters May Contact:Laura W. Hunter, Bank of America,
1.704.577.1164laura.w.hunter@bankofamerica.com
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