GLOBAL GREEN BOND INITIATIVE

Investment fund targeting to invest in green bonds in emerging markets.

The Fund will invest in green bonds in Emerging Markets and Developing Economies ("EMDEs"). The Fund's objective is to enable EMDEs to mobilise institutional investors to finance local climate and environmental projects through green bonds and thereby to increase such projects' access to capital. At the same time, the Fund will help EMDEs in developing credible green bond frameworks (a key condition to spur public and private issuances), while promoting the EU sustainable finance frameworks. GGBI will therefore play a pivotal role in scaling up green finance in the EMDEs, given its role as a market enabler, anchor investor, and standard setter. GGBI will in particular support first-time issuers, as well as established issuers committed to increasing the transparency and the environmental performance of the assets underlying the green bonds.

EIB is leading a consortium of European Development Finance Institutions to create a EUR 1.5-2bn Fund (Global Green Bond Initiative, GGBI, "the Fund") dedicated to purchasing green and sustainability bonds in emerging markets and developing economies ("EMDEs"), and is aiming to invest up to 300 MEUR. GGBI will invest in bonds issued by sovereigns, sub-sovereigns, and corporates. It will aim to increase private capital flows towards green projects in emerging markets and increase the know-how of green bond issuers. Through its innovative structure (with a high diversification at the Fund's portfolio level and first-loss equity capital providing protection to senior notes), the Fund is designed to crowd-in institutional investors into EMDEs green and sustainability bonds, a space that they would not normally invest. Additionally, by buying a part of individual bond issuances as an anchor investor, the Fund would send a strong signal to other investors, hence having additional catalytic effect. By signalling that there is a committed pool of capital looking for investments in EMDEs green bonds, the Fund will provide issuers the comfort to issue their green or sustainability bonds.

Transitioning to a greener economy ranks high in national, regional and global priorities, as demonstrated in countries' commitment to climate action under the Paris Agreement. By providing much needed funds and expertise to GGBI, the EIB investment is expected to support the green bond market in EMDEs, while its linked technical assistance ("TA") facility will support the adoption of the EU Taxonomy and the EU Green Bond Standard. Therefore, GGBI will contribute to scaling up the green bond issuances in EMDEs with a view to foster a climate resilient and low-carbon economies and contribute to closing the climate funding gap.

Green bonds play a key role in helping to finance the investments needed to achieve the EU's 2030 Climate and Energy Objectives as well as the UN Sustainable Development Goals. As such, The GGBI is a Team Europe initiative and directly delivers against the European Global Gateway strategy to boost smart, clean and secure investments across different economic sectors in the world. The operation also supports the targets set out in the NDICI framework. Climate is a key thematic focus of NDICI and calls for actions to support international and Union initiatives to promote climate change adaptation and mitigation. GGBI will support regional initiatives such as Climate Change and Resilience in Africa and the Green Transition in Latin America and the Caribbean.

The primary SDGs targeted are 9 (Industry, Innovation and Infrastructure), 10 (Reduced Inequalities), 13 (Climate Action), and 17 (Partnerships for the Goals).

The Fund will be required to have an environmental and social policy and the appropriate management systems in place so as to comply with the social and environmental requirements of the Bank. The assessment of the environmental, climate and social impacts and risks will be part of the standard due diligence process that the fund will have to carry out for each portfolio company and any underlying investment and, thereby ensuring that the portfolio and these investments are in compliance with national law and in line with the principles and standards of relevant EU environmental legislation as well as the EIB's Environmental and Social Standards.

The Bank will ensure that the projects it finances within the Fund are procured in line with the Bank's Guide to Procurement.

Under EFSD+ Guarantee