The Private Infrastructure Development Group (PIDG) has agreed to support a fund managed by Global Infrastructure Partners (GIP), a part of BlackRock, in an initiative aimed at mobilising approximately US$750 million in private institutional investment for climate-resilient infrastructure projects in emerging markets and developing economies.

The support, which remains subject to regulatory and investor approvals, includes a US$6.4 million first-loss catalytic capital investment by PIDG in the GIP Infrastructure Resilience Development Fund (IRDF).

In addition, GuarantCo, PIDG’s guarantee arm, will provide certain IRDF investors with a US$35 million partial second-loss guarantee at the end of the fund’s life.

The IRDF is a blended finance fund developed in partnership with the Insurance Development Forum. It is intended to support investments that improve protection against natural disasters and strengthen climate resilience in developing countries.

According to PIDG, the first-loss investment and guarantee are designed to improve the fund’s risk profile for institutional investors and encourage investment in sectors such as clean energy, water and sanitation, transport, digital infrastructure and other climate-resilient assets.

PIDG Chief Executive Officer Philippe Valahu said the initiative is intended to demonstrate how private capital can be attracted to infrastructure projects in emerging markets.

“This partnership with BlackRock will represent a paradigm shift in how we finance climate-resilient infrastructure in the markets that need it most,” he said.

He added that the initiative aims to show that private investment can be mobilised at scale for infrastructure projects in Africa and Asia.

The fund’s structure is expected to serve as a model for future fund-level credit enhancement mechanisms designed to attract institutional capital to infrastructure projects in developing economies.

PIDG said the transaction aligns with the United Nations Sustainable Development Goal 13 on climate action and forms part of its broader strategy to mobilise private investment for sustainable infrastructure projects in developing countries.