09 May Q&A with Alex Liftman
Illustration by Melissa McGill
As Global Environmental Executive for Bank of America, Alex Liftman is responsible for the company’s environmental sustainability strategy. She oversees the bank’s aggressive operational goals, its environmental business initiative, and its policy positions and philanthropic investments.
Q.What is the Catalytic Finance Initiative?
The Catalytic Finance Initiative (CFI) is a multipartner collaboration launched in September 2014 by Bank of America. The goal of the initiative is to stimulate at least $10 billion of new investment into high-impact, yet hard to finance, clean-energy and sustainability projects. The initiative is focused on developing or advancing innovative financing structures that reduce investment risk, and thereby attract a broader range of institutional investors to these projects. Bank of America began the initiative with a $1 billion capital commitment and asked others to join.
Q.What are the main goals of the Initiative?
The goal of the CFI is to demonstrate how we can accelerate and scale up investment into high-impact clean energy projects by making it easier for larger amounts of capital to be mobilized and invested. In general, we expect CFI to focus on large-scale renewable energy and energy efficiency opportunities, new financing structures for increasing energy access in emerging markets, and expanding the types of green bonds being issued to include green project bonds and green asset–backed securities as well as new corporate issuers in emerging markets. The CFI is also part of the bank’s larger $125 billion environmental business commitment that helps to address climate change and outsized demands on natural resources through lending, investing, capital raising, advisory services, and developing financing solutions for clients around the world.
Q.How has the partnership expanded?
On April 6, 2016, we announced the expansion of the CFI to an additional eight partners with a total commitment of $8 billion. Partners joining the CFI include AllianceBernstein (AB); Babson Capital Management LLC, a subsidiary of Massachusetts Mutual Life Insurance Company (MassMutual); Crédit Agricole CIB; European Investment Bank (EIB); HSBC Group; International Finance Corporation (IFC), a member of the World Bank Group; and Mirova, a subsidiary of Natixis Group, all of which have pledged capital and expertise to develop and advance innovative financing structures for investments in clean energy and other sustainability-focused projects. In addition, the Aligned Intermediary, representing a group of long-term institutional investors, will collaborate on specific investment opportunities with members of the partnership.
Q.What has the partnership accomplished?
Examples of deals we have completed at Bank of America Merrill Lynch include:
- A partnership with the New York State Green Bank totaling $800 million to enable a scale-up of energy efficiency financing;
- Arranging a $204 million green project bond for wind developer Energia Eolica S.A. in Peru;
- Contributing to a $100 million facility being structured with the Global Alliance for Clean Cookstoves to provide a new working capital facility for companies active across the clean cookstoves value chain; and
- Structuring and arranging a $978 million green project bond to refinance Meerwind, an offshore wind project in the North Sea, Europe’s largest ever renewable project bond.