The Overseas Private Investment Corporation (OPIC) has issued its first green guaranties to US investors to back climate-friendly projects, with US solar firms expected to benefit.

OPIC, the US government’s development finance agency, is offering the debt under the terms of the 2014 Green Bond Principles, which were drawn up by the financial sector in collaboration with environmental NGOs.

OPIC green guaranties funded US$47 million of the US$230 million the agency is providing to First Solar for the Luz del Norte project in Chile.

“The offering of OPIC’s first green guaranties is a significant milestone. This underscores commitments made by both OPIC and the US Government towards addressing the global challenge of climate change,” said Elizabeth Littlefield, president and CEO, OPIC. “This is the kind of innovative, impactful financing that has helped keep this agency nimble and effective over the past four decades as the world of development finance has been swiftly evolving."

OPIC said it would continue to identify renewable energy projects that adhered to the Green Bond Principles that green guaranties could be offered on.

The guaranties are effectively government-backed bonds that will now be offered on the domestic US debt markets. The resulting finance will be drawn from the private sector. OPIC operates at no cost to taxpayers. It’s investment policy is aligned to US foreign policy and money is allocated so as to boost the presence of US companies in emerging markets.