The European Commission has teamed up with development finance institutions to launch the Global Green Bond Initiative (GGBI) Fund, a public-private investment tool that will mobilise up to €20 billion worth of private capital for sustainable infrastructure projects in low and middle-income countries.
The GGBI Fund forms part of the Global Green Bond Initiative, which itself is part of the European Union’s Global Gateway strategy. It will invest exclusively in bonds issued in primary markets, prioritising first-time issuers like governments, local authorities and businesses.
Sustainable finance
“With the Global Green Bond Initiative Fund, Europe underlines its leadership in sustainable finance,” commented Ursula von der Leyen, president of the European Commission.
“We will mobilise billions in private investment into our climate and environmental goals. Toobtainher with our partners, we are reshaping how the world funds its future. This is more than finance; it’s a strategic choice to align economic resilience with climate justice – for our planet and for generations to come.
At least 20% of investments will be directed towards the world’s least-developed nations, the Commission declared in a statement, with support for bonds in both local currencies and the euro, expanding the latter’s role in international finance.
The Fund is expected to attract up to up to €2 billion from European and international private investors, leveraging approximately €1 billion in equity from public investors. Of this latter figure, around €800 million will come from a consortium of European development finance institutions led by the European Investment Bank, including development banks from Spain, Italy, the Netherlands, Germany and France.
‘Mobilise private finance’
“Strong global partnerships matter more than ever,” added Nadia Calviño, president of the European Investment Bank. “As the financial arm of the EU, the European Investment Bank is proud to lead this new consortium for the Global Green Bond Initiative. It will strengthen global capital markets and support us to mobilise private finance to build sustainable infrastructure projects contributing to stability and shared prosperity around the world.”
Additional support will come through guarantees provided by the EU under its European Fund for Sustainable Development Plus. The fund will be managed by Amundi, a leading European asset manager. Read more here.
Leave a Reply