Innovative climate finance guarantee firm launched at the LSE

A new organisation has been launched that will seek to support the delivery of projects in developing countries by offering green guarantees to institutional investors.

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The Green Guarantee Company (GGC) was co-founded by the Development Guarantee Group and Cardano Development.

It will provide guarantees for institutional investors buying green bonds in a bid to help spur climate finance for developing countries.

The guarantees will be “pivotal” in enabling countries to access debt financing by granting access to larger pools of capital and improved credit ratings.

The GGC is initially going to leverage $100m, from investors including the UK’s Foreign Commonwealth & Development Office (FCDO), USAID, Norfund and the Nigeria Sovereign Investment Authority, to deploy around $1bn in capital.

Andrew Mitchell, UK Minister of State in the FCDO, commented that the company’s “ambition to unlock $1bn in climate finance is a clear illustration of the powerful role that public markets can play in mobilising the capital needed to realise the climate transition in emerging markets”.