The European Union and partner development finance institutions have signed the Global Green Bond Initiative (GGBI) Fund, a new public-private investment tool to mobilise up to €20 billion of private capital for sustainable infrastructure projects in low and middle-income countries.

The GGBI Fund is one of the three pillars of the Global Green Bond Initiative, a flagship of the European Union’s Global Gateway strategy. It aims to unlock up to €3 billion in green bonds in partner countries and help finance activities that support climate and environmental goals. The fund will invest exclusively in bonds issued in primary markets, prioritising first-time issuers like governments, local authorities and businesses. At least 20% of investments will target the world’s least developed countries, with support for bonds in both local currency and euro. This will help strengthen local capital markets and promote the international use of the euro. As a leading worldwide green bond issuer, the EU will promote high environmental standards and share best practices with partner countries.

The GGBI Fund is expected to crowd in up to €2 billion from European and international private investors, leveraging approximately €1 billion in equity from public investors. Of this, close to €800 million will come from a consortium of European development finance institutions led by the European Investment Bank, alongside the European Bank for Reconstruction and Development, and development banks from Spain, Italy, the Netherlands, Germany and France. The European Commission will provide credit protection to the consortium through its European Fund for Sustainable Development Plus (EFSD+) Guarantee. This amount will be complemented by equity contributions from the Government of the Grand Duchy of Luxembourg, implemented via LuxDev, and later on with additional funding expected from the Green Climate Fund upon finalisation of the documentation process later this year. The fund will be managed by Amundi, the largest European asset manager.