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Financial systems development

Green finance – a new development policy approach


Green finance is an innovative approach of German de­vel­op­ment co­op­er­a­tion. The financial sector in co­op­er­a­tion coun­tries becomes part of the transition process to a low carbon, resource efficient economy and to improved adjustment to climate change.

For instance, financing products are made available to facilitate invest­ment in resource-saving production techniques. The introduction of needs-driven financial services, such as insurance cover against extreme weather events, allows the popu­la­tion and the institutions affected to cover them­selves against the consequences of climate change.

Green finance is part of a strategy that is intended to foster en­vi­ron­men­tal­ly sound eco­nom­ic growth in co­op­er­a­tion coun­tries. Qualitative eco­nom­ic growth is a central component of sus­tain­able de­vel­op­ment which also en­dea­vours to reduce pov­er­ty in de­vel­op­ing coun­tries.

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