This consists of a public entity established specifically to facilitate private investment into domestic low-carbon, climate-resilient (LCR) infrastructure. Using innovative transaction structures, risk-reduction and transaction-enabling techniques, and local and market expertise, green investment banks (GIB) are channelling private investment, including from institutional investors, into low-carbon projects. GIBs can facilitate investments in commercial and residential energy efficiency retrofits, rooftop solar photovoltaic systems and municipal-level, energy-efficient street lighting.
National, regional and municipal funds
Moderate - tried and tested
Enabling conditions and success factors
- Setting up an institution such as this usually requires adequate capitalisation, technical assistance for legal and institutional aspects, sufficient positive track record, meeting fiduciary and other standards, and capacity in a variety of topics (financial, institutional, sectoral).
- Such an institution can be considered, depending on the set-up, as a one-stop shop for green investments in a city, thereby reducing overlaps and increasing effectiveness and efficiency.
Challenges and risks to implementation
- Capitalisation and adequate capacity to ensure its sustainability may not be sustained.