A new global guarantee platform designed to help public development banks access much larger pools of private finance through capital markets is being launched today, Devex has learned.
The platform, which will be hosted by an independent entity likely based in Luxembourg, aims to help public development banks, or PDBs, issue green or sustainable bonds on the capital markets, which is meant to attract private sector investors. A total of $10 billion will be made available for the guarantees and $25 million for technical assistance.
The hope is that this will unlock new pools of capital for climate and development priorities and reduce the cost of financing for climate-vulnerable countries. With more access to finance, these small, local public development banks could get higher credit ratings from rating agencies, helping them increase their lending capacity. The goal is to double the number of public development banks that have access to capital markets by 2030.