JPMorgan’s development finance arm structures first deal
JPMorgan’s (JPM.N)’s development finance institution has structured its first deal, a $250 million five-year green bond for a power firm in Georgia, as it targets $100 billion for development projects annually, executives say.
The deal for Georgia Global Utilities, to be settled on Thursday, is the first where that arm of the bank has been named development finance structuring agent.
Adding developmental finance and green funding to the deal, meaning capital is raised to support economic development and environmental projects, helped entice a broader range of investors, said Stefan Weiler, head of Central and Eastern Europe, Middle East and Africa debt capital markets at JPMorgan.
“If we hadn’t, this deal would have been trickier and may not have happened at all,” he said.
JPMorgan in January launched its development institution through which it aims to fund more than $100 billion annually in development activities from investment banking deals, with extra contributions from its markets businesses.
“We’re seeing debt capital market deals and export finance deals among other types of transaction,” said Faheen Allibhoy, managing director of the bank’s development finance institution.
“Our pipeline is diverse, including from financial institutions in Africa, an infrastructure project in the Middle East, a renewable energy project in Latin America, and transport-related in Asia.”
From the investor side, the bank was seeing a lot of demand from development finance institutions as anchor investors, non-traditional investors with a green or environmental, social and governance (ESG) focus, as well as large bond houses with pools dedicated to emerging markets and, increasingly ESG, she said.