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Development banks play a pivotal role in the Climate Bonds Initiative’s strategy by supporting the mobilization of green capital and enhancing the development of local green bond markets. Here are the key ways in which they contribute:
<h2>Key Roles of Development Banks</h2>
<ol>
<li><strong>Issuance of Green Bonds</strong>: Development banks, such as the European Investment Bank (EIB) and the World Bank, were among the first to issue green bonds, pioneering this financial instrument for climate action. This helps fund green projects and supports other issuers in the green bond market.</li>
<li><strong>Capacity Building and Technical Assistance</strong>: Development banks aid governments in green bond issuance by providing capacity building and technical assistance. This includes project pipeline development, framework creation, and securing service providers, ensuring that issuance aligns with national climate goals.</li>
<li><strong>Anchor Investments</strong>: By providing anchor investments in local green bonds, development banks enhance the credibility of issuers and build investor confidence, which is crucial for developing domestic green finance markets.</li>
<li><strong>Green Aggregation Facilities</strong>: These banks can sponsor or invest in green aggregation facilities, which standardize contracts and loans, driving the credibility and standardization of green securitization.</li>
<li><strong>Alignment with Climate Goals</strong>: Development banks are encouraged to transition into "green banks" by dedicating a larger portion of their funding to green initiatives and aligning all activities with the Paris Agreement and national climate goals. This involves setting clear targets for increasing green investments and phasing out support for fossil fuels.</li>
<li><strong>Market Creation and Scaling</strong>: By creating market facilities and scaling up investable project pipelines, development banks help increase the availability of green projects for private investors, thereby mobilizing more private capital into the green economy.</li>
</ol>
In summary, development banks are instrumental in promoting green finance, enhancing market credibility, and ensuring alignment with global climate objectives through their active engagement with the Climate Bonds Initiative.
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