Agence Française de Développement (AFD), the European Investment Bank (EIB) and European Development Finance Institutions (EDFI) will establish a joint climate change fund after the signing of a memorandum of understanding for the Interact Climate Change

AFD, EIB and EDFI members will sign a Memorandum of Understanding for the Interact Climate Change Fund (ICCF) at a meeting in Bruges on Friday. The Parties intend to establish an investment matching facility to invest in private sector climate change projects in Africa, the Caribbean and the Pacific, Asia and Latin America before the end of 2010.

The institutions have extensive experience operating across developing countries and emerging markets and share a joint interest in financing climate change and climate efficiency projects with the aim of creating a portfolio of climate friendly private sector investments in target countries.

Partners will seek to demonstrate the financial attractiveness of climate-friendly projects to private sector investors in developing countries and emerging markets and will commit to act as catalyst lead investors to attract additional long-term investments.

The institutions will further promote use of clean technology as an integral part of economic development and provide long term financing for renewable energy projects in countries facing acute energy shortages and restricted energy access, further contributing to economic development.

Funding is expected to be provided by Agence Française de Développement, the European Investment Bank through the Cotonou Investment Facility and 12 EDFI members. The initiative has the twin aim of promoting sustainable development of private sector climate change projects and strengthening meaningful co-operation between European Development Finance Institutions, AFD and the European Investment Bank.