Germany has launched a climate protection fund to help local banks invest in energy efficiency and renewable for small businesses and households in developing countries. The European nation is looking to begin the fund with more than $100 million.
The initial capital will be funded by the Federal Ministry of the Environment (BMU) and state-owned development bank KfW, with the hope of attracting more than $500 million within the next five years from public and private investors.
“As a result of the BMU providing equity capital and hence taking on some of the commercial risk, we are creating the necessary incentives for private investors to take a stake,” said environment minister Norbert Röttgen.
It is anticipated that the European Investment Bank will likely contribute to the fund with main priority countries including Brazil, China, India, Indonesia, Philippines, South Africa, Turkey, and Ukraine. A tender is out to select a private-sector fund manager to operate the fund with the award to be announced within weeks.
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