BNP Paribas Drives Positive Change in the EU with Impact Bonds Initiative

BNP Paribas Drives Positive Change in the EU with Impact Bonds Initiative

(IN BRIEF) BNP Paribas, in collaboration with Banque des Territoires and the European Investment Fund (EIF), has launched a new marketplace initiative called the BNP Paribas European Impact Bonds Fund 2. This fund aims to support the expansion of Impact Bonds across the European Union. With a target size of €70 million, the fund will finance projects that have a positive impact on society and the environment while promoting innovation in public policy. Strategic investors, including Banque des Territoires, EIF, and BNP Paribas Cardif, have joined forces to create the fund. Managed by BNP Paribas Asset Management, the fund will focus on addressing social needs and environmental challenges. Already, 10 projects have been selected for funding, covering areas such as employment for refugees and vulnerable youth, CO2 emissions reduction, and waste reduction. The launch event for the fund brought together project leaders, investors, and public authorities in Paris. This initiative aims to foster collaboration between the public, private, and social sectors and drive positive societal change across Europe.

(PRESS RELEASE) PARIS, 26-Jun-2023 — /EuropaWire/ — BNP Paribas (EPA: BNP), European Union’s leading bank, in partnership with Banque des Territoires and the European Investment Fund (EIF), is proud to announce the launch of its latest marketplace initiative – the BNP Paribas European Impact Bonds Fund 2. Building on the success of the first Social Impact Bonds fund introduced in France and the European Union three years ago, and in alignment with the recommendations of the Cazenave Report, this new fund aims to accelerate the growth of the Impact Bond market throughout the European Union. The target size of the fund is €70 million.

The creation of the fund is a collaborative effort between three strategic investors: Banque des Territoires, a division of Groupe Caisse des Dépôts; the European Investment Fund (EIF); and BNP Paribas Cardif, the insurance subsidiary of the BNP Paribas Group. Managed by BNP Paribas Asset Management, the fund will provide financing for projects that generate positive societal or environmental impacts, driving innovation in public policies while delivering cost savings for governments.

To mark the launch of the fund, BNP Paribas will convene project leaders, investors, and representatives from public authorities at L’Ascenseur in Paris, located in the 4th arrondissement, which serves as the headquarters for the first coalition for equal opportunities.

Impact Bonds serve as a unique financing tool that fosters collaboration between the public, private, and social and solidarity economy sectors. Their purpose is to generate innovative projects with positive societal or environmental impacts. Project leaders receive pre-financing from investors, and if the predefined impact objectives are met, the government reimburses the initial investment. This financing approach facilitates the widespread development of effective solutions grounded in local needs, emphasizing prevention and innovation in support of public policies, while enabling public authorities to avoid certain social and economic costs.

“Banque des Territoires is delighted to be subscribing to this new fund, which stems from an ambitious marketplace initiative. It will promote social innovation in the regions and, as such, is perfectly aligned with Banque des Territoires’ priority mission of social and regional cohesion for more inclusive regions.” Christophe Genter, Head of Social and Territorial Cohesion Department, Banque des Territoires.

The BNP Paribas European Impact Bonds Fund 2, with a target size of €70 million, counts among its strategic investors:

• Banque des Territoires, which has been actively involved in Social Impact Bonds in France since their inception in 2016.
• The EIF, providing substantial support for the development of Social Impact Bonds in Europe and France.
• BNP Paribas Cardif, dedicated to promoting societal innovation in regional areas and targeting an average annual positive impact investment objective of €1 billion between 2019 and 2025.

Drawing on the expertise and resources of these private investors, which prioritize societal impact, the fund will implement an investment strategy focused on addressing social needs and environmental challenges, particularly in the context of the just transition. In France, the fund will finance projects approved by the Ministries of Labour, Employment and Integration, Economy and Finance, and ADEME, with key areas of focus including the professional inclusion of disadvantaged youth, social reintegration of former prisoners or individuals with disabilities, circular economy initiatives, and the prevention of food waste.

“The EIF has been involved in the development of Social Impact Bonds since 2015, first in the UK, then in Finland for the integration of refugees, in the Netherlands for the reinstatement of soldiers, and in France for the alternative to incarceration for homeless and mentally ill people. In keeping with its principles, the EIF has also supported several Impact Bond fund managers in France and Sweden, directly and indirectly investing a total of €75 million in Impact Bonds. With the BNP Paribas European Impact Bonds Fund 2 and the support of the InvestEU programme, the EIF is confirming its aim of working towards a more sustainable market by supporting a team with expertise in the structuring and follow-up of Impact Bonds.” Roger Havenith, Deputy Chief Executive, EIF.

Already, the BNP Paribas European Impact Bonds Fund 2 has selected 10 projects for funding, which include:

• Facilitating lasting employment or providing training leading to qualifications for over 1,500 refugees, vulnerable youth, and individuals with disabilities.
• Aiming to avoid more than 16,000 tonnes of CO2 emissions.
• Promoting the reuse of over 5,000 tonnes of waste.

To effectively manage the fund and ensure successful project origination, BNP Paribas will leverage the experience gained from the pilot fund launched in 2019 in collaboration with its subsidiary, BNP Paribas Asset Management. The subsidiary specializes in impact investing and the management of solidarity funds, overseeing €2.7 billion in assets in this domain. Furthermore, BNP Paribas will utilize its dedicated team focused on structuring Impact Bonds. The €10 million pilot fund has been fully invested over the course of three years, supporting eight projects in areas such as child protection, combating school dropout rates, addressing homelessness among young people classified as NEET (not in employment, education, or training), and preventing falls among the elderly in France, Belgium, and the Netherlands. The innovative approaches employed by project leaders have already influenced changes in public policies.

Since 2016, BNP Paribas has successfully structured or co-structured 17 Social Impact Bonds (SIBs) in Europe, with a total value of €51 million. The bank has invested nearly €22 million in these SIBs.

“Impact Bonds help accelerate the development of projects that make a genuine contribution to better inclusion of vulnerable populations and to preserving the environment. Since 2016, BNP Paribas has acted as both structurer and investor in Impact Bonds, and we are delighted to continue creating the right conditions for their development alongside committed and prominent investors. Impact Bonds will play an increasingly important role in the coming years to support actions in favour of a fair transition.” Antoine Sire, Head of Company Engagement, BNP Paribas.

About de BNP Paribas

BNP Paribas is the European Union’s leading bank and key player in international banking. It operates in 65 countries and has nearly 185,000 employees, including more than 145,000 in Europe. The Group has key positions in its three main fields of activity: Commercial, Personal Banking & Services for the Group’s commercial & personal banking and several specialised businesses including BNP Paribas Personal Finance and Arval; Investment & Protection Services for savings, investment and protection solutions; and Corporate & Institutional Banking, focused on corporate and institutional clients. Based on its strong diversified and integrated model, the Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporates and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance. In Europe, BNP Paribas has four domestic markets: Belgium, France, Italy and Luxembourg. The Group is rolling out its integrated commercial & personal banking model across several Mediterranean countries, Turkey, and Eastern Europe. As a key player in international banking, the Group has leading platforms and business lines in Europe, a strong presence in the Americas as well as a solid and fast-growing business in Asia-Pacific. BNP Paribas has implemented a Corporate Social Responsibility approach in all its activities, enabling it to contribute to the construction of a sustainable future, while ensuring the Group’s performance and stability.

About Banque des Territoires

Set up in 2018, Banque des Territoires is one of Caisse des Dépôts’ five areas of expertise. It brings together within a single structure all of our in-house expertise for local areas. As a one-stop shop for customers, it provides bespoke solutions in terms of consulting and financing through loans and investment to meet the needs of local authorities, social housing bodies, local public undertakings and the legal professions. It has been set up to serve the interests of all local areas alike, from rural municipalities to large cities, with the ambition of combating social inequality and territorial divisions. Banque des Territoires is also rolled out across Caisse des Dépôts’ 16 regional managements and 37 territorial offices so as to resonate more meaningfully with our customers, in their neighbourhoods.

For more attractive, including, sustainable and connected territories.

www.banquedesterritoires.fr @BanqueDesTerr

About the European Investment Fund (EIF)

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized enterprises (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.

Press contacts

BNP Paribas
Indira Salinas – +33 (0)7 89 56 44 79 – indira.salinas@bnpparibas.com
Astrid Sancho – +33 (0)7 62 52 36 41 – astrid.sancho@bnpparibas.com

Banque des Territoires/Groupe Caisse des Dépôts
Malek Prat – +33 (0)6 71 43 46 38 – malek.prat@caissedesdepots.fr

European Investment Fund
Christophe Alix – +33 (0)6 11 81 60 99 – c.alix@eib.org

SOURCE: BNP Paribas