The U.S. government, in collaboration with USAID and the Presidential initiative, Prosper Africa, has unveiled its participation in a pioneering public-private initiative.
This venture aims to establish the Green Guarantee Company (GGC), a groundbreaking privately operated guarantee company with a focus on catalyzing green bonds and loans in partner countries, specifically targeting regions like Africa, Asia, and Latin America.
Pending final documentation, the United States, represented by USAID, the State Department, and Prosper Africa, along with the UK’s Foreign Commonwealth and Development Office, the Green Climate Fund, Norfund, and the Nigerian Sovereign Investment Authority, is set to contribute to the GGC’s initial balance sheet, starting at $100 million.
With this financial foundation, the Green Guarantee Company is projected to unlock an estimated $1 billion in new mainstream private capital for climate finance by 2024.
As part of its commitment, the United States has allocated $5 million in technical assistance through USAID’s EDGE Fund, an additional $3 million in seed funding from Prosper Africa, and $2 million from the State Department.
These contributions are dedicated to establishing the world’s first credit guarantor exclusively focused on climate solutions in developing nations.
The GGC will shoulder the financial risk associated with green bonds and loans, strategically mitigating risk and effectively spurring substantial private investments in climate solutions.
Adopting a blended finance approach that combines donor funding with private capital, the U.S. government demonstrates its commitment to innovative strategies for mobilizing and localizing increased private investments in climate projects.
