Global development banks on Tuesday threw their weight behind a plan to mobilize up to $21 billion to invest in green bonds issued by corporates, sovereigns and subnational governments initially in Latin America and the Caribbean and eventually in other emerging markets.
The renewed push by eight development financiers – including the Inter-American Development Bank and its private sector arm IDB Invest – for the Green Global Bond Initiative (GGBI) will also support the launch of a public-private fund of roughly $2 billion that will serve as an “investment anchor” for green bonds issued across developing markets, allowing the fund to leverage up to an additional $19 billion in private capital.
“There is now a global initiative and we are bringing the countries of Latin America and the Caribbean to the table,” IDB President Ilan Goldfajn told LatinFinance in an interview. “We are involved in all the countries [in the region] that want to issue. We are talking to Colombia about issuing [green bonds], we are talking to Brazil about issuing [green bonds].”
The new pledge, which was signed in Colombia during a summit of development banks, will also aid issuers with capacity-building and providing technical assistance at country level in order to explore ways to help partner countries develop credible green bond frameworks, Goldfajn said. He added that the participation of the IDB and IDB Invest was critical in helping the region to take advantage of the GGBI initiative, which was first announced by European Commission President Ursula von der Leyen in June.
“We are getting our European partners to put the platform on the global scale. It is not a transparency platform, but an initiative to help with issues. It is more like technical assistance. It is a way to help develop and design green instruments,” Goldfajn said on the sidelines of the Finance in Common (FiCS) summit which convenes public development banks from around the world, this year in Cartagena, Colombia.
Ricardo Mourinho Félix, vice president of the European Investment Bank (EIB), one of the new backers of the initiative, said it would help scale up green bonds at global level and make sure they are green. “What is green is green, we are not talking about 25 shades of green,” Mourinho said on a panel moderated by LatinFinance.
An announcement for the initiative described it as a partnership between “Team Europe,” the IDB and IDB Invest “as a strategic reinforcement to the Green Global Bond Initiative for its deployment in Latin America and the Caribbean.”
The initiative will run in parallel to the bank’s own Green Bond Transparency Platform, which lists 235 green bonds totaling $43.5 billion. Launched in 2021, it includes everything from Chile’s landmark $1.5 billion 2050 sustainable bond issued in 2020 to the most recent entrant, a $30-million issuance by Argentina’s Genneia, an energy company, in July.
The IDB Group and the EIB are joined by the European Bank for Reconstruction and Development (EBRD), Germany’s KfW, Italy’s Cassa Depositi e Prestiti (CDP), the Spanish Agency for International Development Cooperation (AECID) and Proparco, a branch of the French Development Agency (AFD), as well as the Green Climate Fund, as signatory institutions supporting the initiative.
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