Allianz Global Investors has secured $690m for a new fund targeting climate projects in emerging markets. The Allianz Credit Emerging Markets fund is about 70% of the way to its $1bn goal. Concessionary capital of $150m comes from British International Investment, Global Affairs Canada, and the Inter-American Development Bank.

The fund uses a junior tranche to absorb risk for private investors, which include Allianz SE and Swiss pension provider GastroSocial. This structure aims to crowd in institutional capital that might otherwise avoid emerging-market climate deals due to perceived risk. The strategy invests in renewables, transport, and financial services aligned with the Paris Agreement.

About 40% of capital is earmarked for Africa, a higher proportion than in similar funds. The fundraising occurs as reduced aid budgets pressure development finance, making blended finance structures more critical. AllianzGI's head of private markets, Edouard Jozan, cited collaboration between public and private sectors as key to scaling this asset class.