The German GLS Bank is investing EUR 22 million in the Green for Growth Fund, Southeast Europe (GGF) as part of its impact investment strategy, especifically in sustainable energy, said the bank.
The investment will leverage existing investments from donors and international financial institutions, and provide additional funding for energy efficiency (EE) and renewable energy (RE) projects in the Fund’s target region.
The funding will be used to finance EE and small-scale RE projects for businesses and households within the Southeast Europe and European Neighbourhood regions.
The investment brings the total private capital in GGF to EUR 28.5 million, accounting for almost 10% of total funding. Of the EUR 22 million invested, GLS Bank will retain EUR 5 million on its own books. GLS is the first social and ecological bank in Germany and focuses on business in agriculture, development, education, health care and social welfare. Hence, the partnership between GGF and GLS is a perfect fit.
“The GGF is very pleased to have GLS as an investor. GLS Bank’s strong reputation in sustainable investments makes them a perfect and natural partner for the GGF,” said Christopher Knowles, Chairman of the Board of Directors of the Green for Growth Fund, Southeast Europe.
The GGF’s target countries are characterized by rising energy demand and a mostly obsolete energy infrastructure; in most countries energy is produced primarily from coal and gas-fired power plants. During the past five years the Fund was able to support more than 26 partner institutions in Southeast Europe and the Caucasus region with funding and/or technical assistance.
To date an estimated 218 thousand tons of CO2, and over 850 thousand MWh of electrical power have been saved annually through energy efficiency and renewable energy investments financed by the GGF.
“We are delighted at this opportunity to offer investors a sustainable financial product that, on one hand, addresses their risk profile, and on the other reflects their values,” added Thomas Goldfuss, head of GLS Wealth Management.
GLS stands for “Gemeinschaftsbank für Leihen und Schenken”, meaning “community bank for loans and donations.” Founded in 1974, GLS Bank currently finances around 23,000 projects and businesses. The Bank focuses on cultural, social and ecological projects which try to tackle challenges in our society by developing creative solutions.
GLS Bank is directing this investment to its client group of ‘Well Informed Investors’. The subscription was closed on March 11th. The minimum investment for the bearer bond was set at EUR 200,000. The term maturity was set at 5 years and the interest rate at 1.8% plus 6 months EURIBOR