Brussels: The European Union, in collaboration with partner development finance institutions, has initiated the Global Green Bond Initiative (GGBI) Fund, a pioneering public-private investment tool projected to mobilise up to £20 billion of private capital towards sustainable infrastructure projects in low and middle-income countries.
According to Cyprus News Agency, the GGBI Fund represents a key pillar of the European Union's Global Gateway strategy, aiming to generate up to £3 billion in green bonds within partner nations. The fund will prioritize first-time issuers such as governments, local authorities, and businesses, with at least 20% of investments directed towards the world's least developed countries. This initiative will promote both local capital market strength and the international use of the euro. As a leading global green bond issuer, the EU is committed to advocating high environmental standards and disseminating best practices among partner countries.
The initiative anticipates attracting up to £2 billion from European and international private investors, leveraging approximately £1 billion in equity from public investors. Nearly £800 million of this will originate from a consortium of European development finance institutions led by the European Investment Bank, joined by the European Bank for Reconstruction and Development, and development banks from Spain, Italy, the Netherlands, Germany, and France. The European Commission will extend credit protection through its European Fund for Sustainable Development Plus (EFSD+) Guarantee. The Government of Luxembourg will contribute equity via LuxDev, with further funding expected from the Green Climate Fund later in the year. Amundi, the largest European asset manager, will manage the fund.
The Global Green Bond Initiative, with its three-pillar approach, underlines the EU's commitment to fostering sustainable investments in developing countries through green bonds, technical assistance, and a green coupon subsidy facility. This comprehensive strategy is a part of the EU's broader Global Gateway framework, which aims to enhance digital, energy, and transport links while ensuring high environmental, social, and governance standards worldwide.